AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 21, 2001
REGISTRATION NO. 333-64344
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
SIRIUS SATELLITE RADIO INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
-------------------
DELAWARE 52-1700207
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
-------------------
1221 AVENUE OF THE AMERICAS, 36TH FLOOR
NEW YORK, NEW YORK 10020
212-584-5100
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
-------------------
PATRICK L. DONNELLY
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
SIRIUS SATELLITE RADIO INC.
1221 AVENUE OF THE AMERICAS, 36TH FLOOR
NEW YORK, NEW YORK 10020
212-584-5100
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
-------------------
COPY TO:
GARY L. SELLERS
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
212-455-2000
-------------------
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: From time to time, after
this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
(continued on next page)
________________________________________________________________________________
Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
prospectus herein also relates to the remaining $29,362,500 of Debt Securities,
Preferred Stock, Common Stock and Warrants registered on Form S-3 (Registration
No. 333-86003) of Sirius Satellite Radio Inc. (formerly CD Radio Inc.), which
was declared effective on September 23, 1999. This Registration Statement also
constitutes Post-Effective Amendment No. 1 to Registration Statement No.
333-86003 and upon the effectiveness of such Post-Effective Amendment, this
Registration Statement and Registration Statement No. 333-86003 will relate to
an aggregate of $529,362,500 of Debt Securities, Preferred Stock, Common Stock
and Warrants of Sirius Satellite Radio Inc.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED DECEMBER 21, 2001
PROSPECTUS
$500,000,000
[LOGO] SIRIUS Satellite Radio
DEBT SECURITIES, PREFERRED STOCK,
COMMON STOCK AND WARRANTS
We from time to time may offer:
unsecured or secured debt securities in one or more series;
shares of preferred stock in one or more series;
shares of common stock;
warrants or other rights to purchase debt securities, preferred stock or
common stock or any combination of securities; and
any combination of debt securities, preferred stock, common stock or warrants,
at an aggregate initial public offering price not to exceed $500,000,000.
The number, amount, prices, net proceeds to Sirius Satellite Radio Inc. and
specific terms of the securities will be determined at or before the time of
sale and will be set forth in an accompanying prospectus supplement.
The net proceeds to us from the sale of the securities will be the initial
public offering price or the purchase price of those securities less any
applicable commission or discount, and less any other expenses we incur in
connection with the issuance and distribution of those securities.
If any agents or any underwriters are involved in the sale of the foregoing
securities, their names and any applicable commission or discount will be set
forth in the accompanying prospectus supplement.
This prospectus may not be used for the sale of any securities unless it is
accompanied by a prospectus supplement. The accompanying prospectus supplement
may modify or supersede any statement in this prospectus.
Nasdaq National Market trading symbol: 'SIRI.'
INVESTING IN OUR SECURITIES INVOLVES RISK, INCLUDING THE RISKS DESCRIBED IN THE
DOCUMENTS INCORPORATED BY REFERENCE IN THIS PROSPECTUS. YOU SHOULD CAREFULLY
CONSIDER THE IMPORTANT RISK FACTORS SET FORTH IN THE DOCUMENTS INCORPORATED BY
REFERENCE IN THIS PROSPECTUS AND IN THE ACCOMPANYING PROSPECTUS SUPPLEMENT
BEFORE INVESTING IN OUR SECURITIES.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
----------------------------
The date of this prospectus is , 2001.
TABLE OF CONTENTS
PAGE
----
Special Note Regarding Forward-Looking Statements........... 2
About this Prospectus....................................... 3
About Sirius................................................ 3
Risk Factors................................................ 4
Ratio of Earnings to Combined Fixed Charges and Preferred
Stock Dividends........................................... 5
Use of Proceeds............................................. 5
Description of Debt Securities.............................. 5
Description of Capital Stock................................ 17
Description of Warrants..................................... 27
Plan of Distribution........................................ 31
Legal Matters............................................... 32
Experts..................................................... 32
Incorporation by Reference.................................. 32
Where You May Find Additional Available Information About
Us........................................................ 32
-------------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS MAY ONLY BE USED WHERE IT IS
LEGAL TO SELL THESE SECURITIES. THE INFORMATION IN THIS PROSPECTUS MAY ONLY BE
ACCURATE ON THE DATE OF THIS PROSPECTUS.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
The following cautionary statements identify important factors that could
cause our actual results to differ materially from those projected in the
forward-looking statements made in this prospectus. Any statements about our
beliefs, plans, objectives, expectations, assumptions or future events or
performance are not historical facts and may be forward-looking. These
statements are often, but not always, made through the use of words or phrases
such as 'will likely result,' 'are expected to,' 'will continue,' 'is
anticipated,' 'estimated,' 'intends,' 'plans,' 'projection' and 'outlook.' Any
forward-looking statements are qualified in their entirety by reference to the
factors discussed throughout this prospectus, and particularly the risk factors
described under 'Risk Factors' in this prospectus. Among the significant factors
that could cause our actual results to differ materially from those expressed in
the forward-looking statements are:
the unavailability of radios capable of receiving our service and our
dependence upon third parties to manufacture and distribute them;
the potential risk of delay in implementing our business plan;
the unproven market for our service; and
our need for additional financing.
The risk factors referred to above could cause actual results or outcomes to
differ materially from those expressed in any forward-looking statements made by
us or on our behalf. Accordingly, you should not place undue reliance on any of
these forward-looking statements. In addition, any forward-looking statement
speaks only as of the date on which it is made, and we undertake no obligation
to update any forward-looking statement or statements to reflect events or
circumstances after the date on which the statement is made, to reflect the
occurrence of unanticipated events or otherwise. New factors emerge from time to
time, and it is not possible for us to predict which will arise or to assess
with any precision the impact of each factor on our business or the extent to
which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements.
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a 'shelf' registration process. Under
this shelf process, we may sell, over the next two years, any combination of the
securities described in this prospectus in one or more offerings up to a total
dollar amount of $500,000,000. This prospectus provides you with a general
description of the securities we may offer. Each time we sell securities, we
will provide a prospectus supplement that will contain specific information
about the terms of that offering. The prospectus supplement may also add, update
or change information contained in this prospectus. You should read both this
prospectus and any prospectus supplement together with the additional
information described under the heading 'Where You May Find Additional Available
Information About Us.'
ABOUT SIRIUS
From our three orbiting satellites, we will directly broadcast up to 100
channels of digital-quality radio to motorists throughout the continental United
States for a monthly subscription fee of $12.95. We will deliver 50 channels of
commercial-free music in virtually every genre, and up to 50 channels of news,
sports, talk, comedy and children's programming. Sirius' broad and deep range of
almost every music format as well as its news, sports and entertainment
programming is not available on conventional radio in any market in the United
States. We hold one of only two licenses issued by the Federal Communications
Commission to operate a national satellite radio system.
Upon commencing commercial operations, we expect our primary source of
revenues to be subscription fees, which we expect will be included with the sale
or lease of certain new vehicles. In addition, we expect to derive revenues from
directly selling or bartering limited advertising on our non-music channels.
We have exclusive agreements with Ford Motor Company, DaimlerChrysler
Corporation and BMW of North America, LLC that contemplate their manufacturing
and selling vehicles that include radios capable of receiving our broadcasts.
These agreements cover all brands and affiliates of these automakers, including
Ford, Chrysler, Mercedes, BMW, Jaguar, Mazda and Volvo. Our agreement with
DaimlerChrsyler also makes us the preferred provider of satellite radio in
Freightliner and Sterling heavy trucks. In 2000, Ford, DaimlerChrysler and BMW
sold or leased approximately 7.5 million vehicles in the continental United
States, which was approximately 43% of all new cars and trucks sold in the
continental United States last year.
In addition, in the autosound aftermarket, we expect that radios capable of
receiving our broadcasts will be available for sale at various national and
regional retailers, such as Best Buy, Circuit City, Tweeter Home Entertainment
Group and Good Guys. In 2000, 11 million car radios were sold through consumer
electronics retailers.
We have entered into agreements with numerous consumer electronics
manufacturers, including Alpine Electronics Inc., Clarion Co., Ltd., Delphi
Delco Electronics Systems, Kenwood Corporation, Matsushita Communication
Industrial Corporation of USA, Recoton Corporation, Sony Electronics Inc. and
Visteon Automotive Systems, to develop radios capable of receiving our
broadcasts. As these radios become available in commercial quantities, they will
be sold to automakers for inclusion in new vehicles and consumer electronics
retailers for sale in the autosound aftermarket.
Sirius Satellite Radio Inc. was incorporated in the State of Delaware as
Satellite CD Radio, Inc. on May 17, 1990. On December 7, 1992, we changed our
name to CD Radio Inc., and we formed a wholly owned subsidiary, Satellite CD
Radio, Inc., that is the holder of our FCC license. On November 18, 1999, we
changed our name again to Sirius Satellite Radio Inc. Our executive offices are
located at 1221 Avenue of the Americas, New York, New York 10020, our telephone
number is (212) 584-5100 and our internet address is siriusradio.com.
Siriusradio.com is an inactive text reference only, meaning that the information
contained on the website is not part of this prospectus and is not incorporated
in this prospectus by reference.
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RISK FACTORS
Investing in our securities involves risk, including the risks described in
the documents incorporated by reference in this prospectus and in the
accompanying prospectus supplement. You should carefully consider the risk
factors before investing in our securities. These risk factors are set forth in
the documents incorporated by reference in this prospectus and, in particular,
in our Annual Report on Form 10-K for the year ended December 31, 2000, in our
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2001, June 30,
2001 and September 30, 2001, and in any filings made with the Securities and
Exchange Commission after the date of this prospectus pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act.
4
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following table sets forth our ratio of earnings to combined fixed
charges and preferred stock dividends for the periods indicated.
FOR THE
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED
----------------------------------------------- MARCH 31,
1996 1997 1998 1999 2000 2001
---- ---- ---- ---- ---- ----
Ratio of earnings to fixed
charges(1)...................... -- -- -- -- -- --
Ratio of earnings to combined
fixed charges and preferred
stock dividends(1).............. -- -- -- -- -- --
- ---------
(1) No figure is provided for any period during which the applicable ratio was
less than 1.00.
The ratio of earnings to fixed charges is computed by dividing our earnings,
which include income before taxes (excluding the cumulative and transition
effects of accounting changes) and fixed charges, by fixed charges. The ratio of
earnings to combined fixed charges and preferred stock dividends is computed by
dividing earnings by the sum of fixed charges and dividends on preferred stock.
'Fixed charges' consist of interest on debt and a portion of rentals determined
to be representative of interest. For the years ended December 31, 1996, 1997,
1998, 1999, 2000 and the three months ended March 31, 2001, our earnings were
insufficient to cover our fixed charges by approximately $2.8 million, $4.8
million, $62.3 million, $119.4 million, $198.5 million and $58.4 million,
respectively. Earnings were also inadequate to cover our combined fixed charges
and preferred stock dividends over the same time periods by approximately $2.8
million, $59.1 million, $99.9 million, $153.5 million, $247.4 million and $68.8
million, respectively.
USE OF PROCEEDS
Unless otherwise indicated in the applicable prospectus supplement, we will
use the net proceeds from the sale of the offered securities for general
corporate purposes, including capital expenditures, the reduction of
indebtedness and other purposes. We may invest funds not required immediately
for such purposes in short-term obligations or we may use them to reduce the
future level of our indebtedness.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the debt securities sets forth
certain general terms that may apply to the debt securities. The particular
terms of any debt securities will be described in the prospectus supplement
relating to those debt securities. For purposes of this 'Description of Debt
Securities,' the term 'Sirius' refers to our company but not to any of its
subsidiaries.
Any senior debt securities will be issued in one or more series under an
indenture, as supplemented or amended from time to time, between us and an
institution that we will name in the related prospectus supplement, as trustee.
Any subordinate debt securities will be issued in one or more series under an
indenture, as supplemented or amended from time to time, between us and an
institution that we will name in the related prospectus supplement, as trustee.
For ease of reference, we will refer to the indenture relating to any senior
debt securities as the senior indenture and to the indenture relating to any
subordinate debt securities as the subordinate indenture.
This summary of the terms and provisions of the debt securities and the
indentures is not necessarily complete, and we refer you to the copy of the
forms of the indentures which are filed as exhibits to the registration
statement of which this prospectus forms a part. Whenever we refer
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to particular defined terms of the indentures in this section or in a prospectus
supplement, we are incorporating these definitions into this prospectus or the
prospectus supplement.
GENERAL
The debt securities will be issuable in one or more series in accordance
with an indenture supplemental to the applicable indenture or a resolution of
our board of directors or a committee of the board. Unless otherwise specified
in a prospectus supplement, each series of senior debt securities will rank
equally in right of payment with all of our other senior obligations. Each
series of subordinate debt securities will be subordinated and junior in right
of payment to the extent and in the manner described in the subordinate
indenture and any supplemental indenture relating to the subordinate debt
securities. Except as otherwise provided in a prospectus supplement, the
indentures do not limit our ability to incur other secured or unsecured debt,
whether under the indentures, any other indenture that we may enter into in the
future or otherwise. For more information, you should read the prospectus
supplement relating to a particular offering of securities.
The applicable prospectus supplement will describe the following terms of
the series of debt securities with respect to which this prospectus is being
delivered:
the title of the debt securities of the series and whether such series
constitutes senior debt securities or subordinated debt securities;
any limit on the aggregate principal amount of the debt securities;
the person to whom any interest on a debt security shall be payable, if
other than the person in whose name that debt security is registered on the
regular record date;
the date or dates on which the principal and premium, if any, of the debt
securities of the series are payable or the method of that determination or
the right to defer any interest payments;
the rate or rates (which may be fixed or variable) at which the debt
securities will bear interest, if any, or the method of determining the
rate or rates, the date or dates from which such interest will accrue, the
interest payment dates on which any such interest will be payable or the
method by which the dates will be determined, the regular record date for
any interest payable on any interest payment date and the basis upon which
interest will be calculated if other than that of a 360-day year of twelve
30-day months;
the place or places where the principal of and any premium and any interest
on the debt securities of the series will be payable, if other than the
Borough of Manhattan, The City of New York;
the period or periods within which, the date or dates on which, the price
or prices at which and the terms and conditions upon which the debt
securities of the series may be redeemed, in whole or in part, at our
option or otherwise;
our obligation, if any, to redeem, purchase or repay the debt securities of
the series pursuant to any sinking fund or analogous provisions or at the
option of the holders and the period or periods within which, the price or
prices at which, the currency or currencies including currency unit or
units in which and the terms and conditions upon which, the debt securities
shall be redeemed, purchased or repaid, in whole or in part;
the terms, if any, upon which the debt securities of the series may be
convertible into or exchanged for other debt securities, preferred stock or
common stock of Sirius and the terms and conditions upon which the
conversion or exchange shall be effected, including the initial conversion
or exchange price or rate, the conversion or exchange period and any other
additional provisions;
the denominations in which any debt securities will be issuable, if other
than denominations of $1,000 and any integral multiple thereof;
6
the currency, currencies or currency units in which payment of principal of
and any premium and interest on debt securities of the series shall be
payable, if other than United States dollars;
any index, formula or other method used to determine the amount of payments
of principal of and any premium and interest on the debt securities;
if the principal amount payable at the stated maturity of debt securities
of the series will not be determinable as of any one or more dates before
the stated maturity, the amount that will be deemed to be the principal
amount as of any date for any purpose, including the principal amount
thereof which will be due and payable upon any maturity other than the
stated maturity or which will be deemed to be outstanding as of any date
(or, in any such case, the manner in which the deemed principal amount is
to be determined), and if necessary, the manner of determining the
equivalent thereof in United States currency;
if the principal of or any premium or interest on any debt securities is to
be payable, at our election or the election of the holders, in one or more
currencies or currency units other than that or those in which such debt
securities are stated to be payable, the currency, currencies or currency
units in which payment of the principal of and any premium and interest on
such debt securities shall be payable, and the periods within which and the
terms and conditions upon which such election is to be made;
if other than the principal amount thereof, the portion of the principal
amount of the debt securities which will be payable upon declaration of the
acceleration of the maturity thereof or provable in bankruptcy;
the applicability of, and any addition to or change in, the covenants and
definitions then set forth in the applicable indenture or in the terms then
set forth in such indenture relating to permitted consolidations, mergers
or sales of assets;
any changes or additions to the provisions of the applicable indenture
dealing with defeasance, including the addition of additional covenants
that may be subject to our covenant defeasance option;
whether any of the debt securities are to be issuable in permanent global
form and, if so, the depositary or depositaries for such global security
and the terms and conditions, if any, upon which interests in such debt
securities in global form may be exchanged, in whole or in part, for the
individual debt securities represented thereby in definitive registered
form, and the form of any legend or legends to be borne by the global
security in addition to or in lieu of the legend referred to in the
applicable indenture;
the appointment of any trustee, any authenticating or paying agents,
transfer agent or registrars;
the terms, if any, of any guarantee of the payment of principal, premium
and interest with respect to debt securities of the series and any
corresponding changes to the provisions of the applicable indenture as then
in effect;
the terms, if any, of the transfer, mortgage, pledge or assignment as
security for the debt securities of the series of any properties, assets,
moneys, proceeds, securities or other collateral, including whether certain
provisions of the Trust Indenture Act are applicable and any corresponding
changes to provisions of the applicable indenture as then in effect;
any addition to or change in the events of default with respect to the debt
securities of the series and any change in the right of the trustee or the
holders to declare the principal, premium and interest with respect to the
debt securities due and payable;
any applicable subordination provisions in addition to those set forth
herein with respect to subordinated debt securities;
if the securities of the series are to be secured, the property covered by
the security interest, the priority of the security interest, the method of
perfecting the security interest and any escrow arrangements related to the
security interest; and
7
any other terms of the debt securities not inconsistent with the provisions
of the applicable indenture.
We may sell debt securities at a substantial discount below their stated
principal amount or debt securities that bear no interest or bear interest at a
rate which at the time of issuance is below market rates. We will describe the
material U.S. federal income tax consequences, accounting and other special
considerations applicable to the debt securities in the applicable prospectus
supplement.
If the purchase price of any of the debt securities is payable in one or
more foreign currencies or currency units or if any debt securities are
denominated in one or more foreign currencies or currency units or if the
principal of, premium, if any, or interest, if any, on any debt securities is
payable in one or more foreign currencies or currency units, we will set forth
the restrictions, elections, specific terms and other information with respect
to such issue of debt securities and such foreign currency or currency units in
the applicable prospectus supplement.
EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise indicated in the applicable prospectus supplement,
principal, premium, if any, and interest, if any, on the debt securities will be
payable, without coupons, and the exchange of and the transfer of debt
securities will be registrable, at our office or agency maintained for such
purpose in the Borough of Manhattan, The City of New York and at any other
office or agency maintained for such purpose. Unless otherwise indicated in the
applicable prospectus supplement, the debt securities will be issued in
denominations of $1,000 and any integral multiples thereof.
Holders may present each series of debt securities for exchange as provided
above, and for registration of transfer, with the form of transfer endorsed
thereon, or with a satisfactory written instrument of transfer, duly executed,
at the office of the appropriate securities registrar or at the office of any
transfer agent designated by us for such purpose and referred to in the
applicable prospectus supplement, without service charge and upon payment of any
taxes and other governmental charges as described in the indenture. We will
appoint the trustee of each series of debt securities as securities registrar
for such series under the indenture. If the applicable prospectus supplement
refers to any transfer agents, in addition to the securities registrar initially
designated by us with respect to any series, we may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, provided that we maintain a transfer
agent in each place of payment for the series. We may at any time designate
additional transfer agents with respect to any series of debt securities.
All moneys paid by us to a paying agent for the payment of principal,
premium, if any, or interest, if any, on any debt security which remain
unclaimed for two years after such principal, premium or interest has become due
and payable may be repaid to us, and after such time, the holder of such debt
security may look only to us for payment.
In the event of any redemption, we shall not be required to (a) issue,
register the transfer of or exchange debt securities of any series during a
period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of debt securities of that series to be
redeemed and ending at the close of business on the day of such mailing or (b)
register the transfer of or exchange any debt security called for redemption,
except, in the case of any debt securities being redeemed in part, any portion
not being redeemed.
BOOK-ENTRY SYSTEM
The provisions set forth below in this section headed 'Book-Entry System'
will apply to the debt securities of any series if the prospectus supplement
relating to such series so indicates.
Unless otherwise indicated in the applicable prospectus supplement, the debt
securities of such series will be represented by one or more global securities
registered with a depositary named in the prospectus supplement relating to such
series. Except as set forth below, a global security may
8
be transferred, in whole but not in part, only to the depositary or another
nominee of the depositary.
The specific terms of the depositary arrangement with respect to a series of
debt securities will be described in the prospectus supplement relating to the
series. We anticipate that the following provisions will generally apply to
depositary arrangements.
Upon the issuance of a global security, the depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the debt securities represented by such global security to the accounts of
institutions or persons, commonly known as participants, that have accounts with
the depositary or its nominee. The accounts to be credited will be designated by
the underwriters, dealers or agents. Ownership of beneficial interests in a
global security will be limited to participants or persons that may hold
interests through participants. Ownership of interests in such global security
will be shown on, and the transfer of those ownership interests will be effected
only through, records maintained by the depositary (with respect to
participants' interests) and such participants (with respect to the owners of
beneficial interests in such global security). The laws of some jurisdictions
may require that certain purchasers of securities take physical delivery of the
securities in definitive form. These limits and laws may impair the ability to
transfer beneficial interests in a global security.
So long as the depositary, or its nominee, is the registered holder and
owner of such global security, the depositary or such nominee, as the case may
be, will be considered the sole owner and holder for all purposes of the debt
securities and for all purposes under the applicable indenture. Except as set
forth below or as otherwise provided in the applicable prospectus supplement,
owners of beneficial interests in a global security will not be entitled to have
the debt securities represented by such global security registered in their
names, will not receive or be entitled to receive physical delivery of debt
securities in definitive form and will not be considered to be the owners or
holders of any debt securities under the applicable indenture or such global
security. Accordingly, each person owning a beneficial interest in a global
security must rely on the procedures of the depositary and, if such person is
not a participant, on the procedures of the participant through which such
person owns its interest, to exercise any rights of a holder of debt securities
under the applicable indenture of such global security. We understand that under
existing industry practice, in the event we request any action of holders of
debt securities or if an owner of a beneficial interest in a global security
desires to take any action that the depositary, as the holder of such global
security is entitled to take, the depositary would authorize the participants to
take such action, and that the participants would authorize beneficial owners
owning through such participants to take such actions or would otherwise act
upon the instructions of beneficial owners owning through them.
Payments of principal of and premium, if any, and interest, if any, on debt
securities represented by a global security will be made to the depositary or
its nominee, as the case may be, as the registered owner and holder of such
global security, against surrender of the debt securities at the principal
corporate trust office of the trustee. Interest payments will be made at the
principal corporate trust office of the trustee or by a check mailed to the
holder at its registered address. Payment in any other manner will be specified
in the prospectus supplement.
We expect that the depositary, upon receipt of any payment of principal,
premium, if any, of interest, if any, in respect of a global security, will
credit immediately participants' accounts with payments in amounts proportionate
to their respective beneficial interests in the principal amount of such global
security as shown on the records of the depositary. We expect that payments by
participants to owners of beneficial interests in a global security held through
such participants will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of customers
in bearer form or registered in 'street name,' and will be the responsibility of
such participant. Neither Sirius nor the trustee nor any agent of Sirius or the
trustee will have any responsibility or liability for any aspect of the records
relating to, or payments made on account of, beneficial ownership interests in a
global security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests or for any other aspect of the
relationship between the depositary and its participants or the
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relationship between such participants and the owners of beneficial interests in
such global security owning through such participants.
Unless and until it is exchanged in whole or in part for debt securities in
definitive form, a global security may not be transferred except as a whole by
the depositary to a nominee of such depositary or by a nominee of such
depositary to such depositary or another nominee of such depositary.
Unless otherwise provided in the applicable prospectus supplement, debt
securities represented by a global security will be exchangeable for debt
securities in definitive form of like tenor as such global security in
denominations of $1,000 and in any greater amount that is an integral multiple
thereof if:
the depositary notifies us and the trustee that it is unwilling or unable
to continue as depositary for such global security or if at any time the
depositary ceases to be a clearing agency registered under the Exchange Act
and a successor depositary is not appointed by us within 90 days;
we, in our sole discretion, determine not to have all of the debt
securities represented by a global security and notify the trustee thereof;
or
there shall have occurred and be continuing an event of default or an event
which, with the giving of notice or lapse of time, or both, would
constitute an event of default with respect to the debt securities.
Any debt security that is exchangeable pursuant to the preceding sentence is
exchangeable for debt securities registered in such names as the depositary
shall instruct the trustee. It is expected that such instructions may be based
upon directions received by the depositary from its participants with respect to
ownership of beneficial interests in such global security. Subject to the
foregoing, a global security is not exchangeable except for a global security or
global securities of the same aggregate denominations to be registered in the
name of the depositary or its nominee.
OPTION TO DEFER INTEREST PAYMENTS OR TO PAY-IN-KIND
If so described in the applicable prospectus supplement, we will have the
right, at any time and from time to time during the term of any series of debt
securities, to defer the payment of interest for such number of consecutive
interest payment periods as may be specified in the applicable prospectus
supplement, subject to the terms, conditions and covenants, if any, specified in
such prospectus supplement, provided that an extension period may not extend
beyond the stated maturity of the final installment of principal of the series
of debt securities. If provided in the applicable prospectus supplement, we will
have the right, at any time and from time to time during the term of any series
of debt securities, to make payments of interest by delivering additional debt
securities of the same series.
COVENANTS
The covenants, if any, that will apply to a particular series of debt
securities will be set forth in the indenture relating to such series of debt
securities. Except as otherwise specified in the applicable prospectus
supplement with respect to any series of debt securities, we may remove or add
covenants without the consent of holders of the securities.
DEFEASANCE AND COVENANT DEFEASANCE
We may be discharged from our obligations on the debt securities of any
series that have matured or will mature or be redeemed within one year if we
deposit with the trustee enough cash to pay all the principal, interest and any
premium due to the stated maturity date or redemption date of the debt
securities and comply with certain other conditions set forth in the applicable
indenture.
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Each indenture contains a provision that permits us to elect either:
to be discharged after 90 days from all of our obligations (subject to
limited exceptions) with respect to any series of debt securities then
outstanding ('defeasance'); and/or
to be released from our obligations under certain covenants and from the
consequences of an event of default resulting from a breach of those
covenants or cross-default ('covenant defeasance').
To make either of the above elections, we must deposit in trust with the trustee
money and/or U.S. Government Obligations, if the debt securities are denominated
in U.S. dollars, and/or Foreign Government Securities, if the debt securities
are denominated in a foreign currency, which through the payment of principal
and interest under their terms will provide sufficient money, without
reinvestment, to repay in full those senior or subordinate debt securities. As a
condition to defeasance or covenant defeasance, we must deliver to the trustee
an opinion of counsel that the holders of the debt securities will not recognize
income, gain or loss for federal income tax purposes as a result of the
defeasance.
If either of the above events occur, the holders of the debt securities of
the series will not be entitled to the benefits of the indenture, except for
registration of transfer and exchange of debt securities and replacement of
lost, stolen or mutilated debt securities.
EVENTS OF DEFAULT
The following events are defined in the indentures as 'Events of Default'
with respect to a series of debt securities (unless such event is specifically
inapplicable to a particular series as described in the applicable prospectus
supplement):
failure to pay any interest on any debt security of that series when due,
which failure continues for 30 days;
failure to pay principal of or any premium on any debt security of that
series when due;
failure to deposit any sinking fund payment, within 30 days of when due, in
respect of any debt security of that series;
with respect to each series of debt securities, failure to perform any
other of our covenants applicable to that series, which failure continues
for 90 days after written notice to us by the trustee or to us and the
trustee by the holders of at least 25% in principal amount of the
outstanding debt securities of that series specifying such failure,
requiring it to be remedied and stating that such notice is a 'Notice of
Default';
certain events of bankruptcy, insolvency or reorganization involving us;
and
any other Event of Default provided with respect to debt securities of that
series.
If an Event of Default for any series of debt securities occurs and
continues, the trustee or holders of at least 25% in principal amount of the
debt securities of that series may declare the entire principal amount of all
the debt securities of that series to be due and payable immediately. Subject to
certain conditions, the declaration may be annulled and past defaults (except
uncured payment defaults and certain other specified defaults) may be waived by
the holders of a majority of the principal amount of the outstanding debt
securities of that series.
An Event of Default for a particular series of debt securities does not
necessarily constitute an event of default for any other series of debt
securities issued under an indenture.
Each indenture will require the trustee, within 90 days after the occurrence
of a default known to it with respect to any outstanding series of debt
securities, to give the holders of that series notice of the default if uncured
or not waived. However, the trustee may withhold this notice if it determines in
good faith that the withholding of this notice is in the interest of those
holders, except that the trustee may not withhold this notice in the case of a
payment default. The term 'default' for the purpose of this provision means any
event that is, or after notice or lapse of time or both would become, an Event
of Default with respect to debt securities of that series.
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Other than the duty to act with the required standard of care during an
Event of Default, a trustee is not obligated to exercise any of its rights or
powers under the applicable indenture at the request or direction of any of the
holders of debt securities, unless the holders have offered to the trustee
reasonable indemnification. Each indenture provides that the holders of a
majority in principal amount of outstanding debt securities of any series may in
certain circumstances direct the time, method and place of conducting any
proceeding for any remedy available to the trustee, or exercising any trust or
other power conferred on the trustee.
The senior indenture will include a covenant that we will file annually with
the trustee a certificate of no default, or specifying any default that exists.
MODIFICATION, WAIVER AND MEETINGS
We and the trustee may enter into supplemental indentures without the
consent of the holders of debt securities for one or more of the following
purposes:
to evidence the succession of another person to us pursuant to the
provisions of the applicable indenture relating to consolidations, mergers
and sales of assets and the assumption by the successor of our covenants,
agreements and obligations in the applicable indenture and in the debt
securities;
to surrender any right or power conferred upon us by the applicable
indenture, to add to our covenants such further covenants, restrictions,
conditions or provisions for the protection of the holders of all or any
series of debt securities as our board of directors shall consider to be
for the protection of the holders of the debt securities, and to make the
occurrence, or the occurrence and continuance, of a default in any of the
additional covenants, restrictions, conditions or provisions a default or
an Event of Default under the applicable indenture (provided, however, that
with respect to any such additional covenant, restriction, condition or
provision, the supplemental indenture may provide for a period of grace
after default, which may be shorter or longer than that allowed in the case
of other defaults, may provide for an immediate enforcement upon the
default, may limit the remedies available to the trustee upon the default,
or may limit the right of holders of a majority in aggregate principal
amount of any or all series of debt securities to waive the default);
to cure any ambiguity or omission or to correct or supplement any provision
contained in the applicable indenture, in any supplemental indenture or in
any debt securities that may be defective or inconsistent with any other
provision contained therein, to convey, transfer, assign, mortgage or
pledge any property to or with the trustee, or to make such other
provisions in regard to matters or questions arising under the applicable
indenture, in each case as shall not adversely affect the interests of any
holders of debt securities of any series in any material respect;
to modify or amend the applicable indenture to permit the qualification of
such indenture or any supplemental indenture under the Trust Indenture Act
as then in effect;
to add guarantees with respect to any or all of the debt securities or to
secure any or all of the debt securities;
to add to, change or eliminate any of the provisions of the applicable
indenture with respect to one or more series of debt securities; so long as
any such addition, change or elimination not otherwise permitted under the
applicable indenture shall (1) neither apply to any debt security of any
series created before the execution of the supplemental indenture and
entitled to the benefit of the provision nor modify the rights of the
holders of any debt security with respect to the provision, or (2) become
effective only when there is no such debt security outstanding;
to evidence and provide for the acceptance of appointment by a successor or
separate trustee with respect to the debt securities of one or more series
and to add to or change any of the provisions of the applicable indenture
as shall be necessary to provide for or facilitate the administration of
such indenture by more than one trustee;
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to establish the form or terms of debt securities of any series;
to provide for uncertificated debt securities in addition to or in place of
certificated debt securities (provided that the uncertificated debt
securities are issued in registered form for purposes of Section 163(f) of
the Internal Revenue Code or in a manner such that the uncertificated debt
securities are described in Section 163(f)(2)(B) of such Code); and
to make any change that does not adversely affect the rights of any holder.
Modifications and amendments of the applicable indenture may be made by us
and the trustee with the consent of the holders of a majority in principal
amount of the outstanding debt securities of each series affected by such
modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the holder of each outstanding debt
security affected thereby:
change the stated maturity of the principal of, or any installment of
principal of or interest on, any debt security;
reduce the principal amount of, rate of interest on or any premium payable
upon the redemption of any debt security;
reduce the amount of principal of an original issue discount security
payable upon acceleration of the maturity thereof;
change the place of payment where, or the coin or currency in which, any
debt security or any premium or interest thereon is payable;
impair the right to institute suit for the enforcement of any payment on or
with respect to any debt security after the stated maturity, redemption
date or repayment date;
reduce the percentage in principal amount of outstanding debt securities of
any series, the consent of whose holders is required for modification or
amendment of the applicable indenture or for waiver of compliance with
certain provisions of such indenture or for waiver of certain defaults;
change the optional redemption or repurchase provisions in a manner adverse
to any holder; or
modify any of the provisions set forth in this paragraph, except to
increase the percentage of holders whose consent is required for
modifications and amendments of the applicable indenture or to provide that
certain other provisions of the applicable indenture may not be modified or
waived without the consent of the holder of each outstanding debt security
affected thereby.
The holders of a majority in principal amount of the outstanding debt
securities of each series may, on behalf of the holders of all the debt
securities of that series, waive, insofar as that series is concerned,
compliance by us with certain restrictive provisions of the applicable
indenture. The holders of a majority in principal amount of the outstanding debt
securities of each series may, on behalf of all holders of debt securities of
that series and any coupons relating to such series, waive any past default
under the applicable indenture with respect to debt securities of the series,
except a default (a) in the payment of principal of or any premium or interest
on any debt security of such series or (b) in respect of a covenant or provision
of the applicable indenture which cannot be modified or amended without the
consent of each holder of outstanding debt securities of the affected series.
The indentures provide that in determining whether the holders of the
requisite principal amount of the outstanding debt securities have given any
request, demand, authorization, direction, notice, consent or waiver thereunder
or whether a quorum is present at a meeting of holders of debt securities
the principal amount of an original issue discount security that shall be
deemed to be outstanding shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon
acceleration of the maturity thereof;
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the principal amount of a debt security denominated in other than U.S.
dollars shall be the U.S. dollar equivalent, determined on the date of
original issuance of such debt security, of the principal amount of such
debt security (or, in the case of an original issue discount security, the
U.S. dollar equivalent on the date of original issuance of such debt
security of the amount determined (as provided above) of such debt
security); and
debt securities owned by us or any subsidiary of ours shall be disregarded
and deemed not to be outstanding.
In addition, we and the trustees may execute, without the consent of any
holder of the debt securities, any supplemental indenture for the purpose of
creating any new series of debt securities.
SUBORDINATION
Except as set forth in the applicable prospectus supplement, the subordinate
indenture provides that the subordinate debt securities are subordinate and
junior in right of payment to all of our senior indebtedness.
If an Event of Default occurs with respect to any senior indebtedness
permitting the holders thereof to accelerate the maturity thereof and the
default is the subject of judicial proceedings or written notice of such Event
of Default, requesting that payments on subordinate debt securities cease, is
given to us by the holders of senior indebtedness, then unless and until
(1) the default in payment or Event of Default shall have been cured or waived
or (2) 120 days shall have passed after written notice is given and the default
is not the subject of judicial proceedings, no direct or indirect payment, in
cash, property or securities, by set-off or otherwise, will be made or agreed to
be made on account of the subordinate debt securities or interest thereon or in
respect of any repayment, redemption, retirement, purchase or other acquisition
of subordinate debt securities.
Except as set forth in the applicable prospectus supplement, the subordinate
indenture provides that in the event of:
any insolvency, bankruptcy, receivership, reorganization or other similar
proceeding relating to us, our creditors or our property; or
any proceeding for the liquidation or dissolution of Sirius,
all present and future senior indebtedness, including interest accruing after
the commencement of the proceeding, will first be paid in full before any
payment or distribution, whether in cash, securities or other property, will be
made by us on account of subordinate debt securities. In that event, any payment
or distribution, whether in cash, securities or other property, other than
securities of Sirius or any other corporation provided for by a plan of
reorganization or a readjustment, the payment of which is subordinate, at least
to the extent provided in the subordination provisions of the indenture, to the
payment of all senior indebtedness at the time outstanding and to any securities
issued in respect thereof under any such plan of reorganization or readjustment
and other than payments made from any trust described in the 'Defeasance and
Covenant Defeasance' above, which would otherwise but for the subordination
provisions be payable or deliverable in respect of subordinate debt securities,
including any such payment or distribution which may be payable or deliverable
by reason of the payment of any other indebtedness of ours being subordinate to
the payment of subordinated debt securities, will be paid or delivered directly
to the holders of senior indebtedness or to their representative or trustee, in
accordance with the priorities then existing among such holders, until all
senior indebtedness shall have been paid in full. No present or future holder of
any senior indebtedness will be prejudiced in the right to enforce subordination
of the indebtedness evidenced by subordinate debt securities by any act or
failure to act on our part.
The term 'Senior Indebtedness' means:
(1) the principal, premium, if any, interest and all other amounts owed
in respect of all our (A) indebtedness for money borrowed and (B)
indebtedness evidenced by securities, debentures, bonds or other similar
instruments,
(2) all our capital lease obligations,
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(3) all our obligations issued or assumed as the deferred purchase price
of property, all our conditional sale obligations and all our obligations
under any title retention agreement (but excluding trade accounts payable
arising in the ordinary course of business),
(4) all our obligations for the reimbursement of any letter of credit,
banker's acceptance, security purchase facility or similar credit
transaction,
(5) all obligations of the type referred to in clauses (1) through (4)
above of other persons for the payment of which we are responsible or liable
as obligor, guarantor or otherwise, and
(6) all obligations of the type referred to in clauses (1) through (5)
above of other persons secured by any lien on any property or asset of ours
(whether or not such obligation is assumed by us), except for (x) any such
indebtedness that is by its terms subordinated to or pari passu with the
subordinate debt securities and (y) any indebtedness between or among us or
our affiliates, including all other debt securities and guarantees in
respect of those debt securities issued to any trust, or trustee of such
trust, partnership or other entity affiliated with us that is, directly or
indirectly, a financing vehicle of ours (a 'Financing Entity') in connection
with the issuance by such Financing Entity of preferred securities or other
securities that rank pari passu with, or junior to, the subordinate debt
securities.
Except as provided in the applicable prospectus supplement, the subordinate
indenture for a series of subordinated debt does not limit the aggregate amount
of senior indebtedness that may be issued by us. The subordinate debt securities
are effectively subordinated to all existing and future liabilities of our
subsidiaries.
By reason of such subordination, in the event of a distribution of assets
upon insolvency, some of our general creditors may recover more, ratably, than
holders of the subordinated debt securities.
A subordinate indenture may provide that the subordination provisions
thereof will not apply to money and securities held in trust pursuant to the
satisfaction and discharge and the legal defeasance provisions of the
subordinate indenture.
If this prospectus is being delivered in connection with the offering of a
series of subordinated debt securities, the accompanying prospectus supplement
or the information incorporated by reference therein will set forth the
approximate amount of senior indebtedness outstanding as of a recent date.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Except as may otherwise be provided in the prospectus supplement, each
indenture provides that we may not consolidate with or merge with or into any
person, or convey, transfer or lease all or substantially all of our assets, or
permit any person to consolidate with or merge into us, unless the following
conditions have been satisfied:
(a) either (1) we shall be the continuing person in the case of a merger or
(2) the resulting, surviving or transferee person, if other than us (the
'Successor Company'), shall be a corporation organized and existing
under the laws of the United States, any State or the District of
Columbia and shall expressly assume all our obligations under the debt
securities and the applicable indenture;
(b) immediately after giving effect to the transaction (and treating any
indebtedness that becomes an obligation of the Successor Company or any
subsidiary of ours as a result of the transaction as having been
incurred by the Successor Company or the subsidiary at the time of the
transaction), no default, Event of Default or event that, after notice
or lapse of time, would become an Event of Default under the applicable
indenture shall have occurred and be continuing; and
(c) we shall have delivered to the trustee under each indenture an officers'
certificate and an opinion of counsel, each stating that the
consolidation, merger, transfer or lease complies with the provisions of
the applicable indenture.
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Upon completion of any such transaction, the Successor Company resulting
from such consolidation or into which we are merged or the transferee or lessee
to which such conveyance, transfer or lease is made, will succeed to, and be
substituted for, and may exercise every right and power of, us under each
indenture, and thereafter, except in the case of a lease, the predecessor (if
still in existence) will be released from its obligations and covenants under
each indenture and all outstanding debt securities.
NOTICES
Except as otherwise provided in the indentures, notices to holders of debt
securities will be given by mail to the addresses of such holders as they appear
in the Security Register.
CONVERSION OR EXCHANGE
If and to the extent indicated in the applicable prospectus supplement, the
debt securities of any series may be convertible or exchangeable into other
securities. The specific terms on which debt securities of any series may be so
converted or exchanged will be set forth in the applicable prospectus
supplement. These terms may include provisions for conversion or exchange,
either mandatory, at the option of the holder, or at our option, in which case
the number of shares of other securities to be received by the holders of debt
securities would be calculated as of a time and in the manner stated in the
applicable prospectus supplement.
TITLE
Before due presentment of a debt security for registration of transfer, we,
the trustee and any agent of ours or the trustee may treat the person in whose
name such debt security is registered as the owner of such debt security for the
purpose of receiving payment of principal of and any premium and any interest
(other than defaulted interest or as otherwise provided in the applicable
prospectus supplement) on such debt security and for all other purposes
whatsoever, whether or not such debt security be overdue, and neither Sirius,
the trustee nor any agent of ours or the trustee shall be affected by notice to
the contrary.
REPLACEMENT OF DEBT SECURITIES
Any mutilated debt security will be replaced by us at the expense of the
holder upon surrender of such debt security to the trustee. Debt securities that
become destroyed, stolen or lost will be replaced by us at the expense of the
holder upon delivery to the trustee of the debt security or evidence of the
destruction, loss or theft thereof satisfactory to us and the trustee. In the
case of a destroyed, lost or stolen debt security, an indemnity satisfactory to
the trustee and us may be required at the expense of the holder of such debt
security before a replacement debt security will be issued.
GOVERNING LAW
The indentures and the debt securities will be governed by, and construed in
accordance with, the laws of the State of New York.
REGARDING THE TRUSTEE
We may appoint a separate trustee for any series of debt securities. As used
herein in the description of a series of debt securities, the term 'trustee'
refers to the trustee appointed with respect to the series of debt securities.
The indentures contain certain limitations on the right of the trustee,
should it become a creditor of ours, to obtain payment of claims in certain
cases or to realize for its own account on certain property received in respect
of any such claim as security or otherwise. The trustee will be permitted to
engage in certain other transactions; however, if it acquires any conflicting
interest and there is a default under the debt securities of any series for
which the trustee serves as trustee, the trustee must eliminate such conflict or
resign.
The trustee or its affiliate may provide certain banking and financial
services to us in the ordinary course of business.
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DESCRIPTION OF CAPITAL STOCK
Our amended and restated certificate of incorporation provides for
authorized capital of 250,000,000 shares, consisting of 200,000,000 shares of
common stock, par value $0.001 per share, and 50,000,000 shares of preferred
stock, par value $0.001 per share.
The following description sets forth the terms and provisions of our common
stock, preferred stock and of certain classes of preferred stock which have been
authorized by our board of directors. The terms of any shares of our capital
stock offered by any prospectus supplement, but not set forth below, will be
described in the prospectus supplement relating to such shares of capital stock.
COMMON STOCK
As of May 11, 2001, we had 53,843,369 shares of common stock outstanding
held of record by approximately 342 persons, and had reserved for issuance
44,672,324 shares of common stock with respect to incentive stock plans,
outstanding common stock purchase warrants and conversion of our Junior
Preferred Stock.
Holders of our common stock are entitled to cast one vote for each share
held of record on all matters acted upon at any stockholder's meeting and to
receive dividends if, as and when declared by our board of directors out of
funds legally available therefor. There are no cumulative voting rights. If
there is any liquidation, dissolution or winding-up of our company, each holder
of our common stock will be entitled to participate, taking into account the
rights of any outstanding preferred stock, ratably in all of our assets
remaining after payment of liabilities. Holders of our common stock have no
preemptive or conversion rights. All outstanding shares of our common stock,
including shares of common stock issued upon the exercise of the common stock
warrants, will be fully paid and non-assessable.
Our common stock is quoted on the Nasdaq National Market under the symbol
'SIRI.'
PREFERRED STOCK
Our board of directors is authorized, subject to any limitations prescribed
by law, without further stockholder approval, to issue from time to time up to
an aggregate of 50,000,000 shares of our preferred stock, in one or more series.
Each such series of preferred stock will have such number of shares,
designations, preferences, powers, qualifications and special or relative rights
or privileges as will be determined by our board of directors, which may
include, among others, dividend rights, voting rights, redemption and sinking
fund provisions, liquidation preferences, conversion rights and preemptive
rights. The rights of the holders of our common stock will be subject to the
rights of holders of any preferred stock issued in the future. The issuance of
preferred stock, while providing desirable flexibility in connection with
possible acquisitions and other corporate purposes, could have the effect of
making it more difficult for a third party to acquire, or of discouraging a
third party from acquiring, a majority of our outstanding voting stock.
The specific terms of any preferred stock being offered will be described in
the prospectus supplement relating to that preferred stock. The following
summaries of the provisions of the preferred stock are subject to, and are
qualified in their entirety by reference to, the certificate of designation
relating to the particular class or series of preferred stock. Reference is made
to the prospectus supplement relating to the preferred stock offered with that
prospectus for specific terms, including:
the designation of the preferred stock;
the number of shares of the preferred stock offered, the liquidation
preference per share and the initial offering price of the preferred stock;
the dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculating these items applicable to the preferred stock;
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the date from which dividends on the preferred stock will accumulate, if
applicable;
the procedures for any auction and remarketing of the preferred stock;
the provision of a sinking fund, if any, for the preferred stock;
the provision for redemption, if applicable, of the preferred stock;
any listing of the preferred stock on any securities exchange;
the terms and conditions, if applicable, upon which the preferred stock
will be convertible into or exchangeable for common stock, and whether at
our option or the option of the holder;
whether the preferred stock will rank senior or junior to or on a parity
with any other class or series of preferred stock;
the voting rights, if any, of the preferred stock;
any other specific terms, preference, rights, limitations or restrictions
of the preferred stock; and
a discussion of United States federal income tax considerations applicable
to the preferred stock.
PREFERRED STOCK PURCHASE RIGHTS
On October 22, 1997, our board of directors adopted a stockholders rights
plan and, in connection with the adoption of this plan, declared a dividend
distribution of one 'Right' for each outstanding share of common stock to
stockholders of record at the close of business on November 3, 1997 (the 'Rights
Record Date'). Except as described below, each Right entitles the registered
holder of the Right to purchase from us one-hundredth of a share of Series B
Preferred Stock, par value $0.001 per share (the 'Series B Shares'), at a
purchase price of $115.00 (the 'Purchase Price'), which may be adjusted. The
Purchase Price shall be paid in cash. The description and terms of the Rights
are set forth in a Rights Agreement, dated October 22, 1997 (the 'Rights
Agreement'), by and between us and The Bank of New York (the successor to
Continental Stock Transfer & Trust Company), as Rights Agent, and in amendments
to the Rights Agreement dated October 13, 1998, November 13, 1998, December 22,
1998, June 11, 1999, September 29, 1999, December 23, 1999 and January 28, 2000.
On October 13, 1998, we amended the Rights Agreement to make it inapplicable
to the purchase of 5,000,000 shares of common stock by Prime 66 Partners, L.P.
and to allow Prime 66 to purchase and own up to an additional 1% of the
outstanding shares of common stock without Prime 66 becoming an 'Acquiring
Person' within the meaning of the Rights Agreement. On November 13, 1998 and
December 22, 1998, we amended the Rights Agreement to render it inapplicable to
the purchase of the Junior Preferred Stock by the Apollo Investment Fund IV,
L.P. and Apollo Overseas Partners IV, L.P. (collectively, the 'Apollo
Investors') and to permit the Apollo investors to (1) acquire additional shares
of Junior Preferred Stock issued as dividends declared on the Junior Preferred
Stock, (2) acquire additional shares of common stock upon the conversion of
shares of Junior Preferred Stock into shares of common stock, and (3) acquire up
to an additional 1% of the outstanding shares of common stock, without the
Apollo investors becoming 'Acquiring Persons' within the meaning of the Rights
Agreement. On June 11, 1999, we amended the Rights Agreement to make it
inapplicable to the issuance of warrants entitling Ford Motor Company ('Ford')
to acquire from us 4,000,000 shares of our common stock. On September 29, 1999,
we amended the Rights Agreement to make it inapplicable to (1) the purchase by
Ford of up to $20 million of our common stock and (2) the purchase by entities
associated with Everest Capital of up to $30 million of our convertible
subordinated notes. On December 23, 1999, we amended the Rights Agreement to
render it inapplicable to the purchase of our Junior Preferred Stock by The
Blackstone Group L.P. and certain of its affiliates and to permit the Blackstone
investors to (1) acquire additional shares of Junior Preferred Stock as
dividends on such preferred stock, (2) acquire additional shares of common stock
upon the conversion of shares of Junior Preferred Stock, and (3) acquire up to
an additional 1% of the
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outstanding shares of common stock, without the Blackstone investors becoming
'Acquiring Persons' within the meaning of the Rights Agreement. On January 28,
2000, we amended the Rights Agreement to make it inapplicable to the issuance of
warrants entitling DaimlerChrysler Corporation to acquire up to 4,000,000 shares
of our common stock and the purchase by DaimlerChrysler Corporation of up to
2,290,322 shares of our common stock.
Initially, no separate Right certificates were distributed and the Rights
were evidenced, with respect to any shares of common stock outstanding on the
Rights Record Date, by the certificates representing the shares of common stock.
Until the Rights Separation Date (as defined below), the Rights will be
transferred with, and only with, certificates for shares of common stock. Until
the earlier of the Rights Separation Date and the redemption or expiration of
the Rights, new certificates for shares of common stock issued after the Rights
Record Date will contain a notation incorporating the Rights Agreement by
reference. The Rights are not exercisable until the earlier to occur of (1) 10
business days following a public announcement that a person or group of
affiliated or associated persons (an 'Acquiring Person') has acquired, or
obtained the right to acquire, beneficial ownership of 15% or more of the
outstanding shares of common stock (except by reason of (a) exercise by this
person of stock options granted to this person by us under any of our stock
option or similar plans (b) the exercise of conversion rights contained in
specified classes of Preferred Stock, or (c) the exercise of warrants owned on
the date of the Rights Agreement, which include warrants to acquire 1,740,000
shares of common stock issued to an affiliate of Everest Capital Fund, Ltd. or
(2) 15 business days following the commencement of a tender offer or exchange
offer by any person (other than Sirius, any subsidiary of Sirius or any employee
benefit plan of Sirius) if, upon the completion of this tender offer or exchange
offer, this person or group would be the beneficial owner of 15% or more of the
outstanding shares of common stock (the earlier of these dates being called the
'Rights Separation Date'), and will expire on October 22, 2002, unless earlier
redeemed by us as described below. As soon as practicable following the Rights
Separation Date, separate certificates evidencing the Rights will be mailed to
holders of record of the shares of common stock as of the close of business on
the Rights Separation Date and, thereafter, the separate Rights certificates
alone will evidence the Rights. A holder of 15% or more of the common stock as
of the date of the Rights Agreement will be excluded from the definition of
'Acquiring Person' unless the holder increases the aggregate percentage of its
and its affiliates' beneficial ownership interest in us by an additional 1%.
If, at any time following the Rights Separation Date, (1) we are the
surviving corporation in a merger with an Acquiring Person and our shares of
common stock are not changed or exchanged, (2) a person (other than Sirius, any
subsidiary of Sirius or any employee benefit plan of Sirius), together with its
Affiliates and Associates (as defined in the Rights Agreement), becomes an
Acquiring Person (in any manner, except by (a) the exercise of stock options
granted under our existing and future stock option plans, (b) the exercise of
conversion rights contained in specified preferred stock issues, (c) the
exercise of warrants specified in the Rights Agreement or (d) a tender offer for
any and all outstanding shares of common stock made as provided by applicable
laws, which remains open for at least 40 Business Days (as defined in the Rights
Agreement) and into which holders of 80% or more of our outstanding shares of
common stock tender their shares), (3) an Acquiring Person engages in one or
more 'self-dealing' transactions as described in the Rights Agreement or
(4) during the time when there is an Acquiring Person, an event occurs (e.g., a
reverse stock split), that results in the Acquiring Person's ownership interest
being increased by more than one percent, the Rights Agreement provides that
proper provision shall be made so that each holder of a Right will thereafter be
entitled to receive, upon the exercise of the Right at the then current exercise
price of the Right, shares of common stock (or, in some circumstances, cash,
property or other securities of ours) having a value equal to two times the
exercise price of the Right.
If, at any time following the first date of public announcement by us or an
Acquiring Person indicating that this Acquiring Person has become an Acquiring
Person (the 'Shares Acquisition Date'), (1) we consolidate or merge with another
person and we are not the surviving corporation, (2) we consolidate or merge
with another person and are the surviving corporation,
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but in the transaction our shares of common stock are changed or exchanged or
(3) 50% or more of our assets or earning power is sold or transferred, the
Rights Agreement provides that proper provision shall be made so that each
holder of a Right shall thereafter have the right to receive, upon the exercise
of the Right at the then current exercise price of the Right, shares of common
stock of the acquiring company having a value equal to two times the exercise
price of the Right.
Our board of directors may, at its option, at any time after the right of
the board to redeem the Rights has expired or terminated (with some exceptions),
exchange all or part of the then outstanding and exercisable Rights (other than
those held by the Acquiring Person and Affiliates and Associates of the
Acquiring Person) for shares of common stock at a ratio of one share of common
stock per Right, as adjusted; provided, however, that the Right cannot be
exercised once a person, together with the person's Affiliates and Associates,
becomes the beneficial owner of 50% or more of the shares of common stock then
outstanding. If our board of directors authorizes this exchange, the Rights will
immediately cease to be exercisable.
Notwithstanding any of the foregoing, following the occurrence of any of the
events described in the fourth and fifth paragraphs of this section, any Rights
that are, or (under some circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person or Affiliate or Associate of an
Acquiring Person shall immediately become null and void. The Rights Agreement
contains provisions intended to prevent the utilization of voting trusts or
similar arrangements (except for the voting arrangement between Darlene
Friedland, David Margolese and us) that could have the effect of rendering
ineffective or circumventing the beneficial ownership rules described in the
Rights Agreement.
The Purchase Price payable, and the number of Series B Shares or other
securities or property issuable, upon exercise of the Rights may be adjusted
from time to time to prevent dilution (1) in the event of a dividend of
Series B Shares on, or a subdivision, combination or reclassification of, the
Series B Shares, (2) upon the grant to holders of the Series B Shares of
specific rights or warrants to subscribe for Series B Shares or securities
convertible into Series B Shares at less than the current market price of the
Series B Shares or (3) upon the distribution to holders of the Series B Shares
of debt securities or assets (excluding regular quarterly cash dividends and
dividends payable in Series B Shares) or of subscription rights or warrants
(other than those referred to above).
At any time after the date of the Rights Agreement until ten Business Days
(a period that can be extended) following the Shares Acquisition Date, the board
of directors, with the concurrence of a majority of the independent directors
(those members of our board who are not officers or employees of ours or of any
subsidiary of ours and who are not Acquiring Persons or their Affiliates,
Associates, nominees or representatives, and who either (1) were members of the
board before the adoption of the Rights Plan or (2) were subsequently elected to
our board and were recommended for election or approved by a majority of the
independent directors then on our board), may redeem the Rights, in whole but
not in part, at a price of $0.01 per Right, which may be adjusted. Thereafter,
our board of directors may redeem the Rights only in specified circumstances
including in connection with specific events not involving an Acquiring Person
or an Affiliate or Associate of an Acquiring Person. In addition, our right of
redemption may be reinstated if (1) an Acquiring Person reduces its beneficial
ownership to 10% or less of the outstanding shares of common stock in a
transaction or series of transactions not involving us and (2) there is at the
time no other Acquiring Person. The Rights Agreement may also be amended, as
described below, to extend the period of redemption.
Until a Right is exercised, the holder of the Right, as such, will have no
rights as a stockholder, including the right to vote or to receive dividends.
While the distribution of the Rights will not be taxable to stockholders or to
us, stockholders may, depending upon the circumstances, recognize taxable income
if the Rights become exercisable for shares of our common stock (or other
consideration) or for shares of common stock of the Acquiring Person.
Other than those provisions relating to the principal economic terms of the
Rights or imposing limitations on the right to amend the Rights Agreement, any
of the provisions of the Rights Agreement may be amended by our board of
directors with the concurrence of a majority of the
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independent directors or by special approval of our stockholders before the
Rights Separation Date. Thereafter, the period during which the Rights may be
redeemed may be extended (by action of our board of directors, with the
concurrence of a majority of the independent directors or by special approval of
our stockholders), and other provisions of the Rights Agreement may be amended
by action of our board of directors with the concurrence of a majority of the
independent directors or by special approval of our stockholders; provided,
however, that (a) this amendment will not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person) and (b) no
amendment shall be made at a time when the Rights are no longer redeemable
(except for the possibility of the right of redemption being reinstated as
described above).
DELAWARE ANTI-TAKEOVER LAW AND PROVISIONS IN OUR CHARTER
Section 203 of the Delaware General Corporation Law ('Section 203')
generally provides that a stockholder acquiring more than 15% of the outstanding
voting stock of a corporation subject to the statute (an 'Interested
Stockholder') but less than 85% of this stock may not engage in some types of
Business Combinations (as defined in Section 203) with the corporation for a
period of three years after the time the stockholder became an Interested
Stockholder. The prohibition of Section 203 does not apply under the following
circumstances:
before the time of the acquisition, the corporation's board of directors
approved either the Business Combination or the transaction in which the
stockholder became an Interested Stockholder; or
the Business Combination is approved by the corporation's board of
directors and authorized at a stockholders' meeting by a vote of at least
two-thirds of the corporation's outstanding voting stock not owned by the
Interested Stockholder.
Under Section 203, these restrictions will not apply to specific Business
Combinations proposed by an Interested Stockholder following the earlier of the
announcement or notification of specific extraordinary transactions involving
the corporation and a person who was not an Interested Stockholder during the
previous three years, who became an Interested Stockholder with the approval of
the corporation's board of directors or who became an Interested Stockholder at
a time when the restrictions contained in Section 203 did not apply for reasons
specified in Section 203. The above exception applies if the extraordinary
transaction is approved or not opposed by a majority of the directors who were
directors prior to the person becoming an Interested Stockholder during the
previous three years or were recommended for election or elected to succeed
those directors by a majority of those directors.
Section 203 defines the term 'Business Combination' to encompass a wide
variety of transactions with or caused by an Interested Stockholder. These
include transactions in which the Interested Stockholder receives or could
receive a benefit on other than a pro rata basis with other stockholders,
transactions with the corporation which increase the proportionate interest in
the corporation directly or indirectly owned by the Interested Stockholder or
transactions in which the Interested Stockholder receives other benefits.
The provisions of Section 203, coupled with our board of directors'
authority to issue preferred stock without further stockholder action, could
delay or frustrate the removal of incumbent directors or a change in our
control. The provisions could also discourage, impede or prevent a merger,
tender offer or proxy contest, even if the event would be favorable to the
interests of stockholders. Our stockholders, by adopting an amendment to our
amended and restated certificate of incorporation, may elect not to be governed
by Section 203 effective 12 months after the adoption. Neither our certificate
of incorporation nor our by-laws exclude us from the restrictions imposed by
Section 203.
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9.2% SERIES A JUNIOR CUMULATIVE CONVERTIBLE PREFERRED STOCK,
9.2% SERIES B JUNIOR CUMULATIVE CONVERTIBLE PREFERRED STOCK AND
9.2% SERIES D JUNIOR CUMULATIVE CONVERTIBLE PREFERRED STOCK
Our board of directors has authorized the issuance of up to 4,300,000 shares
of 9.2% Series A Junior Cumulative Convertible Preferred Stock and up to
2,100,000 shares of 9.2% Series B Junior Cumulative Convertible Preferred Stock.
As of December 31, 2000, we had 1,595,707 shares of 9.2% Series A Junior
Cumulative Convertible Preferred Stock outstanding and 715,703 shares of 9.2%
Series B Junior Cumulative Convertible Preferred Stock outstanding held of
record by the Apollo investors. Our board of directors has authorized the
issuance of up to 10,700,000 shares of 9.2% Series D Junior Cumulative
Convertible Preferred Stock. As of December 31, 2000, we had 2,145,688 shares of
9.2% Series D Junior Cumulative Convertible Preferred Stock outstanding held of
record by the Blackstone investors.
Dividends. The annual dividend rate per share of the Junior Preferred Stock
is equal to 9.2% of the sum of (1) the liquidation preference of the Junior
Preferred Stock and (2) all unpaid dividends, if any, whether or not declared,
from the date of issuance of the shares of Junior Preferred Stock to the
applicable dividend payment date. Dividends on the shares of Junior Preferred
Stock are cumulative, accruing annually and, when and as declared by our board
of directors, are payable on each November 15 (each, a 'Junior Preferred
Dividend Payment Date'). If any dividend payable on any Junior Preferred
Dividend Payment Date is not declared or paid on the Junior Preferred Dividend
Payment Date in full, in cash or in additional shares of Junior Preferred Stock
of the same series, then the amount of the unpaid dividend ('Default Dividends')
are accumulated and accrue dividends, until paid, compounded annually at a rate
equal to 15% per annum. Dividends may be paid in cash, shares of Junior
Preferred Stock of the same series or any combination of cash and Junior
Preferred Stock, at our option. Default Dividends may only be paid in shares of
Junior Preferred Stock of the same series.
With respect to the payment of dividends, the 9.2% Series A Junior
Cumulative Convertible Preferred Stock, the 9.2% Series B Junior Cumulative
Convertible Preferred Stock and the 9.2% Series D Junior Cumulative Convertible
Preferred Stock rank equally. If and so long as full cumulative dividends
payable on the shares of Junior Preferred Stock in respect of all prior dividend
periods have not been paid or set apart for payment and proper provision has not
been made so that holders of Junior Preferred Stock are offered the opportunity
to make a Payout Election instead of a Conversion Price adjustment (as described
below), we will not pay any dividends, except for dividends payable in common
stock or our capital stock ranking junior to the Junior Preferred Stock in
payment of dividends ('Junior Dividend Stock') or make any distributions of
assets on or redeem, purchase or otherwise acquire for consideration shares of
common stock or Junior Dividend Stock.
If and so long as any accrued and unpaid dividends payable on any shares of
our capital stock ranking senior to the Junior Preferred Stock in payment of
dividends have not been paid or set apart for payment, we will not pay any
dividends in cash on shares of Junior Preferred Stock. No dividends paid in cash
will be paid or declared and set apart for payment on any shares of Junior
Preferred Stock or of our capital stock ranking equally with the Junior
Preferred Stock in the payment of dividends ('Parity Dividend Stock') for any
period unless we have paid or declared and set apart for payment, or
contemporaneously pay or declare and set apart for payment, all accrued and
unpaid dividends on the Junior Preferred Stock for all dividend payment periods
terminating on or before the date of payment of these dividends; provided,
however, that all dividends accrued by us on shares of Junior Preferred Stock or
Parity Dividend Stock will be declared proportionately with respect to all
shares of Junior Preferred Stock and Parity Dividend Stock then outstanding,
based on the ratio of unpaid dividends on the Junior Preferred Stock to unpaid
dividends on the Parity Dividend Stock. No dividends paid in cash will be paid
or declared and set apart for payment on Junior Preferred Stock for any period
unless we have paid or declared and set apart for payment, or contemporaneously
pay or declare and set apart for payment, all accrued and unpaid dividends on
any shares of Parity Dividend Stock for all dividend payment periods terminating
on or before the date of payment of these dividends.
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Redemption. Except as described in the following sentence, shares of 9.2%
Series A Junior Cumulative Convertible Preferred Stock and 9.2% Series B Junior
Cumulative Convertible Preferred Stock may not be redeemed by us at our option
before November 15, 2003. From and after November 15, 2001 and before
November 15, 2003, we may redeem shares of 9.2% Series A Junior Cumulative
Convertible Preferred Stock and 9.2% Series B Junior Cumulative Convertible
Preferred Stock, in whole or in part, at any time at a redemption price of 100%
of the liquidation preference of the shares of 9.2% Series A Junior Cumulative
Convertible Preferred Stock and 9.2% Series B Junior Cumulative Convertible
Preferred Stock redeemed, plus unpaid dividends, if any, whether or not
declared, to the redemption date, if the average closing price of our common
stock as reported in The Wall Street Journal or, at our election, other
reputable financial news source, for the 20 consecutive trading days before the
notice of redemption (the 'Current Market Price') equals or exceeds $60.00 per
share, as adjusted.
From and after November 15, 2003, we may redeem shares of 9.2% Series A
Junior Cumulative Convertible Preferred Stock and 9.2% Series B Junior
Cumulative Convertible Preferred Stock, in whole or in part, at any time at a
redemption price of 100% of the liquidation preference of the 9.2% Series A
Junior Cumulative Convertible Preferred Stock and 9.2% Series B Junior
Cumulative Convertible Preferred Stock redeemed, plus unpaid dividends, if any,
whether or not declared, to the redemption date.
Except as described in the following sentence, shares of our 9.2% Series D
Junior Cumulative Convertible Preferred Stock may not be redeemed by us at our
option before December 23, 2004. From and after December 23, 2002 and before
December 23, 2004, we may redeem shares of our 9.2% Series D Junior Cumulative
Convertible Preferred Stock, in whole or in part, at any time at a redemption
price of 100% of the liquidation preference of the shares of 9.2% Series D
Junior Cumulative Convertible Preferred Stock redeemed, plus unpaid dividends,
if any, whether or not declared, to the redemption date, if the Current Market
Price of our common stock equals or exceeds $68.00 per share, as adjusted.
From and after December 23, 2004, we may redeem shares of our 9.2% Series D
Junior Cumulative Convertible Preferred Stock, in whole or in part, at any time
at a redemption price of 100% of the liquidation preference of the 9.2%
Series D Junior Cumulative Convertible Preferred Stock redeemed, plus unpaid
dividends, if any, whether or not declared, to the redemption date.
On November 15, 2011, we will be required to redeem all outstanding shares
of Junior Preferred Stock at a redemption price of 100% of the liquidation
preference of the Junior Preferred Stock redeemed, plus unpaid dividends, if
any, whether or not declared, to the redemption date.
The amount paid to the holders of shares of Junior Preferred Stock upon
redemption that is allocable to the liquidation preference of the shares of
Junior Preferred Stock will be paid in cash and the amount of any unpaid
dividends to be paid on the shares of Junior Preferred Stock redeemed will be
paid in cash, shares of Junior Preferred Stock of the same series or any
combination of cash and Junior Preferred Stock at our option.
Change of Control. Upon the occurrence of a Change of Control, we must make
an offer (a 'Change of Control Offer') to purchase all then outstanding shares
of Junior Preferred Stock at a purchase price in cash equal to 101% of their
liquidation preference, plus unpaid dividends (paid in cash), if any, whether or
not declared, to the date the shares are purchased; provided that if the
purchase of the Junior Preferred Stock would violate or constitute a default
under (1) our senior discount notes or the indenture relating to our senior
discount notes or (2) the indenture or indentures or other agreement or
agreements under which there may be issued or outstanding from time to time
other indebtedness of Sirius ('Other Agreements') in an aggregate principal
amount not exceeding $450 million (less the amount, if any, of indebtedness
issued to replace, refinance or refund our senior discount notes) because we
have not satisfied all of our obligations under the indenture relating to our
senior discount notes and the Other Agreements arising from the Change of
Control (collectively, the 'Senior Obligations'), then we will be required to
use our best efforts to satisfy the Senior Obligations as promptly as possible
or to obtain the requisite consents necessary to permit the repurchase of the
Junior Preferred Stock, and until the Senior
23
Obligations are satisfied or consents are obtained, we will not be obligated to
make a Change of Control Offer.
With respect to the Junior Preferred Stock, a 'Change of Control' is defined
as the occurrence of any of the following events: (1) any 'person' or 'group'
(as these terms are used in Sections 13(d) and 14(d) of the Exchange Act) is or
becomes the 'beneficial owner' (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to have 'beneficial
ownership' of all securities that the person has the right to acquire, whether
the right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 40% of our total outstanding voting stock;
(2) we consolidate with or merge with or into another person or convey,
transfer, lease or otherwise dispose of all or substantially all of our assets
to any person, or any person consolidates with or merges with or into us, in a
transaction in which our outstanding voting stock is converted into or exchanged
for cash, securities or other property, other than, at all times when the senior
discount notes are outstanding, those transactions that are not deemed a 'Change
of Control' under the terms of the indenture relating to our senior discount
notes; (3) during any consecutive two-year period, individuals who at the
beginning of the period constituted our board of directors (together with any
new directors whose election to our board of directors, or whose nomination for
election by our stockholders, was approved by a vote of 66 2/3% of the directors
then still in office who were either directors at the beginning of the period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of our board of directors then in office; or
(4) we are liquidated or dissolved or a special resolution is passed by our
stockholders approving the plan of liquidation or dissolution, other than, at
all times when our senior discount notes are outstanding, those transactions
that are not deemed a 'Change of Control' under the terms of the indenture
relating to our senior discount notes.
Notwithstanding the foregoing, no transaction or event will be deemed a
'Change of Control' if (1) all of the outstanding shares of common stock are to
be converted pursuant thereto solely into the right to receive, for each share
of common stock so converted, cash and/or shares of Qualifying Acquiror common
stock (valued at its Current Market Price) together having a value in excess of
$30.30, in the case of our 9.2% Series A Junior Cumulative Convertible Preferred
Stock and our 9.2% Series B Junior Cumulative Convertible Preferred Stock or
$37.50 in the case of our 9.2% Series D Junior Cumulative Convertible Preferred
Stock, (2) we have declared and paid all dividends on the Junior Preferred
Stock, whether or not theretofore declared or undeclared, to the date of the
Change of Control and the holders of Junior Preferred Stock have been given
reasonable opportunity to convert, before the Change of Control, any shares of
Junior Preferred Stock so issued as a dividend, and (3) immediately following
the event the number of shares of Qualifying Acquiror common stock into which
shares of Junior Preferred Stock have been converted (together with, if shares
of Junior Preferred Stock are to remain outstanding, any shares of Qualifying
Acquiror common stock into which all outstanding shares of Junior Preferred
Stock would be convertible) represent both (a) less than 5% of the total number
of shares of Qualifying Acquiror common stock outstanding immediately after the
Change of Control and (b) less than one third of the number of shares of
Qualifying Acquiror common stock that would be Publicly Traded immediately after
the event. The term 'Qualifying Acquiror common stock' means the common stock of
any corporation if listed on or admitted to trading on the New York Stock
Exchange, American Stock Exchange or Nasdaq, and the term 'Publicly Traded'
means shares of Qualifying Acquiror common stock that are both (a) held by
persons who are neither officers, directors or Affiliates of the corporation nor
the 'beneficial owner' (as the term is defined in Rule 13d-3 under the Exchange
Act) of 5% or more of the total number of shares then issued and outstanding,
and (b) not 'restricted securities' (as the term is defined in Rule 144 of the
Securities Act).
Conversion. Each share of our 9.2% Series A Junior Cumulative Convertible
Preferred Stock and our 9.2% Series B Junior Cumulative Convertible Preferred
Stock may be converted at any time, at the option of the holder, unless
previously redeemed, into a number of shares of common stock calculated by
dividing the liquidation preference of such preferred stock (without unpaid
dividends) by $30.00. Each share of our 9.2% Series D Junior Cumulative
Convertible Preferred
24
Stock may be converted at any time, at the option of the holder, unless
previously redeemed, into a number of shares of common stock calculated by
dividing the liquidation preference of such preferred stock (without unpaid
dividends) by $34.00. These conversion prices will not be adjusted at any time
for unpaid dividends on the shares of Junior Preferred Stock, but will be
adjusted for the occurrence of some corporate events affecting our common stock.
Upon conversion, holders of the Junior Preferred Stock will be entitled to
receive any unpaid dividends upon the shares of Junior Preferred Stock converted
payable in cash, shares of common stock or a combination of cash and common
stock, at our option.
The conversion prices for shares of Junior Preferred Stock will be adjusted
in some events, including (1) dividends and other distributions payable in
common stock on any class of our capital stock, (2) subdivisions, combinations
and reclassifications of our common stock, (3) the issuance to all holders of
common stock of rights or warrants entitling them to subscribe for or purchase
common stock at less than fair market value, (4) distributions to all holders of
common stock of evidence of our indebtedness or assets, (5) repurchases,
redemptions or other acquisitions of our common stock by us at a price per share
greater than the Current Market Price per share of our common stock on the date
of the event, (6) issuance or sale of common stock by us at a price per share
more than 15% below (or, in the case of any issuance or sale to an affiliate of
ours, any amount below) the Current Market Price per share of our common stock
on the date of the event (except for issuances to or through a nationally
recognized investment banking firm in which our affiliates purchase less than
25% of the shares in the offering) and (7) a consolidation or merger to which we
are a party or the sale or transfer of all or substantially all of our assets.
The conversion prices for shares of Junior Preferred Stock will not be
adjusted if (1) the adjustment would not require an increase or decrease of at
least 1% in the conversion prices then in effect or (2) with respect to each
series of Junior Preferred Stock and in connection with an adjustment that would
be made in respect of a dividend, purchase, redemption or other acquisition,
holders of a majority of the outstanding shares of the series of Junior
Preferred Stock elect to participate in the dividend, purchase, redemption or
other acquisition (a 'Payout Election') proportionately with the holders of
common stock or capital stock ranking junior to the Junior Preferred Stock
('Junior Stock').
Voting Rights. So long as any shares of Junior Preferred Stock are
outstanding, each share of Junior Preferred Stock entitles its holder to vote,
in person or by proxy, at any special or annual meeting of stockholders, on all
matters entitled to be voted on by holders of common stock voting together as a
single class with all other shares entitled to vote those matters. With respect
to these matters, each share of Junior Preferred Stock entitles its holder to
cast that number of votes per share as is equal to the number of votes that the
holder would be entitled to cast had the holder converted its shares of Junior
Preferred Stock into shares of common stock on the record date for determining
our stockholders eligible to vote on these matters.
In addition to any vote or consent of stockholders required by law or by our
amended and restated certificate of incorporation, the consent of the holders of
at least a majority of the shares of a particular series of Junior Preferred
Stock at any time issued and outstanding will be necessary for effecting or
validating any reclassification of that series of Junior Preferred Stock or
amendment, alteration or repeal of any of the provisions of our amended and
restated certificate of incorporation or amended and restated by-laws which
adversely affects the voting powers, rights or preferences of the holders of the
shares of that series of Junior Preferred Stock. The consent of the holders of
at least a majority of the shares of Junior Preferred Stock at the time issued
and outstanding, acting as a single class, will be necessary for effecting or
validating any amendment, alteration or repeal of any of the provisions of our
amended and restated certificate of incorporation or amended and restated
by-laws which affects adversely the voting powers, rights or preferences of the
holders of the shares of any series of Junior Preferred Stock. Any amendment of
the provisions of our amended and restated certificate of incorporation so as to
authorize or create, or to increase the authorized amount of, any Junior Stock
will not be deemed to affect adversely the voting powers, rights or preferences
of the holders of shares of Junior Preferred
25
Stock. The consent of at least a majority of the shares of each series of Junior
Preferred Stock will also be necessary for:
(1) the authorization or creation of, or the increase in the authorized
amount of, or the issuance of any shares of any class or series of, capital
stock ranking senior to the Junior Preferred Stock ('Senior Stock') or any
security convertible into shares of any class or series of Senior Stock;
(2) the authorization or creation of, or the increase in the authorized
amount of, or the issuance of any shares of any class or series of capital
stock ranking equally with the Junior Preferred Stock ('Parity Stock') or
any security convertible into shares of any class or series of Parity Stock
(other than shares of Junior Preferred Stock issued as a dividend in respect
of shares of Junior Preferred Stock issued to the Apollo Investors and the
Blackstone Investors);
(3) our merger or consolidation with or into any other entity, unless,
after the merger or consolidation, the resulting corporation will have no
class or series of shares and no other securities either authorized or
outstanding ranking before, or equally with, shares of Junior Preferred
Stock; provided, however, that no vote or consent of the holders of Junior
Preferred Stock will be required if before the time when the merger or
consolidation is to take effect, and regardless of whether the merger or
consolidation would constitute a Change of Control, a Change of Control
Offer is made for all shares of Junior Preferred Stock at the time
outstanding; and
(4) the application of any of our funds, property or assets to the
purchase, redemption, sinking fund or other retirement of any shares of any
class of Junior Stock, or the declaration, payment or making of any dividend
or distribution on any shares of any class of Junior Stock, other than a
dividend or dividends payable solely in shares of common stock or Junior
Stock of the same series, unless the holders of Junior Preferred Stock have
been offered the opportunity to make a Payout Election with respect to this
event.
In connection with the foregoing class rights to vote, each holder of shares
of Junior Preferred Stock shall have one vote for each share of Junior Preferred
Stock held. No consent of holders of Junior Preferred Stock is required for the
creation of any indebtedness of any kind by us.
Liquidation. If we are voluntarily or involuntarily liquidated, dissolved or
wound up, the holders of shares of Junior Preferred Stock will be entitled to
receive, before any distribution of our assets to the holders of shares of
common stock or any other class or series of Junior Stock, but after payment of
the liquidation preference payable on any class or series of Senior Stock, out
of our assets available for distribution to our stockholders, whether from
capital, surplus or earnings, an amount per share of Junior Preferred Stock
equal to $100, plus accrued and unpaid dividends on each share of Junior
Preferred Stock, if any, to the date of final distribution.
If we are voluntarily or involuntarily liquidated, dissolved or wound up,
before any distribution of our assets to the holders of shares of Junior
Preferred Stock or Parity Stock, the holders of any shares of Senior Stock will
be entitled to receive out of our assets available for distribution to our
stockholders, whether from capital, surplus or earnings, an amount per share of
Senior Stock equal to the liquidation preference of the Senior Stock, plus
accrued and unpaid dividends on the Senior Stock, if any, to the date of final
distribution.
If, upon any liquidation, dissolution or winding-up of us, the amounts
payable with respect to the shares of Junior Preferred Stock or any Parity Stock
are not paid in full, then holders of Junior Preferred Stock and Parity Stock
will share ratably in the distribution of assets, or proceeds of the
liquidation, dissolution or winding-up, in proportion to the full respective
preferential amounts to which they are entitled. Neither a consolidation nor a
merger of us with one or more other corporations, nor a sale or a transfer of
all or substantially all of our assets, will be deemed to be a voluntary or
involuntary liquidation, dissolution or winding-up of us.
Registration Rights. At any time after December 23, 2000, holders of shares
of 9.2% Series A Junior Cumulative Convertible Preferred Stock, or shares of
common stock into which shares of 9.2% Series A Junior Cumulative Convertible
Preferred Stock have been converted, representing, in the aggregate, at least
50% of the shares of common stock into which shares of 9.2% Series A
26
Junior Cumulative Convertible Preferred Stock have been or may be converted
('Series A Registrable Securities') will be entitled, on two occasions, to
require us to register the Series A Registrable Securities for sale in an
underwritten public offering by a nationally recognized investment banking firm
or firms reasonably acceptable to us. At any time after December 23, 2000,
holders of shares of 9.2% Series B Junior Cumulative Convertible Preferred
Stock, or shares of common stock into which shares of 9.2% Series B Junior
Cumulative Convertible Preferred Stock have been converted, representing, in the
aggregate, at least 50% of the shares of common stock into which shares of 9.2%
Series B Junior Cumulative Convertible Preferred Stock have been or may be
converted ('Series B Registrable Securities') will be entitled, on one occasion,
to require us to register the Series B Registrable Securities for sale in an
underwritten public offering by a nationally recognized investment banking firm
or firms reasonably acceptable to us.
At any time after January 31, 2002, holders of shares of 9.2% Series D
Junior Cumulative Convertible Preferred Stock, or shares of common stock into
which shares of 9.2% Series D Junior Cumulative Convertible Preferred Stock have
been converted, representing, in the aggregate, at least 50% of the shares of
common stock into which shares of 9.2% Series D Junior Cumulative Convertible
Preferred Stock have been or may be converted ('Series D Registrable
Securities') will be entitled, on three occasions, to require us to register the
Series D Registrable Securities for sale in an underwritten public offering by a
nationally recognized investment banking firm or firms reasonably acceptable to
us.
If a demand registration would be seriously detrimental to us and our
stockholders, the demand registration may be deferred, at our request, twice in
any 12-month period, for an aggregate period of time of up to 90 days. In
addition, holders of Junior Preferred Stock will be bound by customary 'lockup'
agreements at the request of the managing underwriter of any public offering on
our behalf. If we plan to file a registration statement on behalf of one or more
security holders, holders of Junior Preferred Stock also have the right, taking
into account customary limitations and the rights of the other security holders,
to request that the registration include their Registrable Securities. Holders
of Junior Preferred Stock or Registrable Securities are entitled to an unlimited
number of these 'piggy-back' registrations.
Tag-Along Agreement. David Margolese, our Chairman and Chief Executive, and
we also entered into a tag-along agreement with the Apollo Investors. Under the
tag-along agreement, if Mr. Margolese sells more than 800,000 shares of our
common stock before the earlier of the date that the Apollo Investors
beneficially own less than 2,000,000 shares of the common stock or the date that
is six months after the nationwide commercial introduction of our service, then
the Apollo Investors have rights to sell, proportionately with Mr. Margolese, a
portion of the common stock owned by them in any subsequent transaction in which
Mr. Margolese disposes of 80,000 or more shares of our common stock.
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of debt securities, preferred stock,
common stock or any combination thereof. Warrants may be issued independently or
together with any other securities offered in an applicable prospectus
supplement and may be attached to or separate from such securities. Warrants may
be issued under warrant agreements (each, a 'warrant agreement') to be entered
into between us and a warrant agent specified in the applicable prospectus
supplement. The warrant agent will act solely as our agent in connection with
the warrants of a particular series and will not assume any obligation or
relationship of agency or trust for or with any holders or beneficial owners of
warrants. The following sets forth certain general terms and provisions of
warrants which may be offered. Further terms of the warrants and the applicable
warrant agreement will be set forth in an applicable prospectus supplement.
27
DEBT WARRANTS
The prospectus supplement relating to a particular issue of warrants for the
purchase of debt securities ('debt warrants') will describe the terms of the
debt warrants, including the following:
the title of the debt warrants;
the offering price for the debt warrants, if any;
the aggregate number of the debt warrants;
the designation and terms of the debt securities purchasable upon exercise
of the debt warrants;
if applicable, the designation and terms of the debt securities that the
debt warrants are issued with and the number of debt warrants issued with
each debt security;
if applicable, the date from and after which the debt warrants and any debt
securities issued with them will be separately transferable;
the principal amount of debt securities that may be purchased upon exercise
of a debt warrant and the price at which the debt securities may be
purchased upon exercise (which may be payable in cash, securities or other
property);
the dates on which the right to exercise the debt warrants will commence
and expire;
if applicable, the minimum or maximum amount of the debt warrants that may
be exercised at any one time;
information with respect to book-entry procedures, if any;
the currency or currency units in which the offering price, if any, and the
exercise price are payable;
if applicable, a discussion of material United States federal income tax
considerations;
the antidilution provisions of the debt warrants, if any;
the redemption or call provisions, if any, applicable to the debt warrants;
and
any additional terms of the debt warrants, including terms, procedures, and
limitations relating to the exchange and exercise of the debt warrants.
STOCK WARRANTS
The prospectus supplement relating to a particular issue of warrants for the
purchase of common stock or preferred stock will describe the terms of the
warrants, including the following:
the title of the warrants;
the offering price for the warrants, if any;
the aggregate number of the warrants;
the designation and terms of the common stock or preferred stock that may
be purchased upon exercise of the warrants;
if applicable, the designation and terms of the securities that the
warrants are issued with and the number of warrants issued with each
security;
if applicable, the date from and after which the warrants and any
securities issued with the warrants will be separately transferable;
the number of shares of common stock or preferred stock that may be
purchased upon exercise of a warrant and the price at which such shares may
be purchased upon exercise;
the dates on which the right to exercise the warrants will commence and
expire;
if applicable, the minimum or maximum amount of the warrants that may be
exercised at any one time;
28
the currency or currency units in which the offering price, if any, and the
exercise price are payable;
if applicable, a discussion of material United States federal income tax
considerations;
the antidilution provisions of the warrants, if any;
the redemption or call provisions, if any, applicable to the warrants; and
any additional terms of the warrants, including terms, procedures, and
limitations relating to the exchange and exercise of the warrants.
EXERCISE OF WARRANTS
Each warrant will entitle the holder of warrants to purchase for cash the
amount of shares of preferred stock, shares of common stock or debt securities
at the exercise price as shall in each case be set forth in, or be determinable
as set forth in, the prospectus supplement relating to the warrants offered
thereby. Warrants may be exercised at any time up to the close of business on
the expiration date set forth in the prospectus supplement relating to the
warrants offered thereby. After the close of business on the expiration date,
unexercised warrants will become void.
Warrants may be exercised as set forth in the prospectus supplement relating
to the warrants offered thereby. Upon receipt of payment and the warrant
certificate properly completed and duly executed at the corporate trust office
of the warrant agent or any other office indicated in the prospectus supplement,
we will, as soon as practicable, forward the shares of preferred stock, shares
of common stock or debt securities purchasable upon such exercise. If less than
all of the warrants represented by the warrant certificate are exercised, a new
warrant certificate will be issued for the remaining warrants.
THE UNIT OFFERING WARRANTS
On May 18, 1999, we issued units composed of our 14 1/2% Senior Secured
Notes due 2009 and warrants to purchase an aggregate of 2,368,200 shares of
common stock at a price of $26.45 per share. These warrants were issued under a
warrant agreement, dated as of May 15, 1999, between us, as issuer, and United
States Trust Company of New York, as warrant agent. The number of shares of
common stock to be issued under these warrants will be adjusted in some cases if
we issue additional shares of common stock, options, warrants or convertible
securities and in some other events. These warrants expire on May 15, 2009.
A shelf registration statement covering the resale of the unit offering
warrants has been filed and declared effective. We have agreed to cause the
shelf registration statement to remain effective until the earliest of (1) two
years after the issuance of the unit offering warrants, (2) the time when all
unit offering warrants have been sold under the shelf registration statement and
(3) the time when the unit offering warrants can be sold by persons who are not
our affiliates without restriction under the Securities Act.
A shelf registration statement covering the issuance of the shares of common
stock issuable upon the exercise of the unit offering warrants has been filed
and declared effective. We have agreed to cause this shelf registration
statement to remain effective until the earlier of (1) the time when all unit
offering warrants have been exercised and (2) May 15, 2009.
THE FORD WARRANT
On June 15, 1999, we issued a warrant to Ford which entitles Ford to
purchase up to 4,000,000 shares of our common stock at a purchase price of
$30.00 per share.
Ford's right to exercise this warrant vests:
with respect to 1,000,000 shares of common stock, on the date that Ford has
manufactured 500,000 new vehicles containing Sirius radios ('Ford Enabled
Vehicles');
29
with respect to an additional 500,000 shares of common stock, on the date
that Ford has manufactured an aggregate of 1,000,000 Ford Enabled Vehicles;
with respect to an additional 500,000 shares of common stock, on the date
that Ford has manufactured an aggregate of 2,000,000 Ford Enabled Vehicles;
with respect to an additional 1,000,000 shares of common stock, on the date
that Ford has manufactured an aggregate of 3,000,000 Ford Enabled Vehicles;
and
with respect to an additional 1,000,000 shares of common stock, on the date
that Ford has manufactured an aggregate of 4,000,000 Ford Enabled Vehicles.
The number of shares of common stock to be issued under this warrant will be
adjusted in some cases if we issue stock dividends, combine stock, reorganize or
reclassify capital stock, merge, sell all of our assets and in some other
events. This warrant will expire on the earlier of June 11, 2009 and the date of
termination or expiration of the agreement, dated June 11, 1999, between us and
Ford.
We are required to give Ford notice of adjustments in the number of shares
issuable under this warrant and of extraordinary corporate events.
THE DAIMLERCHRYSLER WARRANT
On January 28, 2000, we issued a warrant to DaimlerChrysler which entitles
DaimlerChrysler to purchase up to 4,000,000 shares of our common stock at a
purchase price of $60.00 per share.
DaimlerChrysler's right to exercise this warrant vests:
with respect to 1,000,000 shares of common stock, on the date that
DaimlerChrysler and its affiliates have manufactured 500,000 new vehicles
containing Sirius radios ('DaimlerChrysler Enabled Vehicles');
with respect to an additional 500,000 shares of common stock, on the date
that DaimlerChrysler and its affiliates have manufactured an aggregate of
1,000,000 DaimlerChrysler Enabled Vehicles;
with respect to an additional 500,000 shares of common stock, on the date
that DaimlerChrysler and its affiliates have manufactured an aggregate of
2,000,000 DaimlerChrysler Enabled Vehicles;
with respect to an additional 1,000,000 shares of common stock, on the date
that DaimlerChrysler and its affiliates have manufactured an aggregate of
3,000,000 DaimlerChrysler Enabled Vehicles; and
with respect to an additional 1,000,000 shares of common stock, on the date
that DaimlerChrysler and its affiliates have manufactured an aggregate of
4,000,000 DaimlerChrysler Enabled Vehicles.
The number of shares of common stock to be issued under this warrant will be
adjusted in some cases if we issue stock dividends, combine stock, reorganize or
reclassify capital stock, merge, sell all of our assets and in some other
events. This warrant will expire on the date of termination or expiration of the
agreement, dated January 28, 2000, among us, DaimlerChrysler Corporation,
Freightliner Corporation and Mercedes-Benz USA, Inc.
We are required to give DaimlerChrysler notice of adjustments in the number
of shares issuable under this warrant and of extraordinary corporate events. If
we issue shares of common stock in an underwritten public offering, we also must
notify DaimlerChrysler and offer to issue DaimlerChrysler, for cash at an equal
price, the number of shares of common stock required so that DaimlerChrysler
will have the same percentage of the total number of shares of common stock
issued and outstanding immediately prior to the offering as after giving effect
to the offering. DaimlerChrysler, however, must exercise this preemptive
purchase right within five days after receiving notice from us and must purchase
its common shares simultaneous with the closing of the offering.
30
LEHMAN WARRANTS
In connection with a term loan facility entered into among us, certain
lenders party thereto from time to time, Lehman Commercial Paper Inc. ('LCPI'),
as syndication agent and as administration agent, and Lehman Brothers Inc., as
arranger, we issued to LCPI warrants to purchase up to 2,100,000 shares of our
common stock at a purchase price of $29.00 per share. All of these warrants are
vested.
525,000 of these warrants expire on December 27, 2010, 1,050,000 of these
warrants expire on March 7, 2011 and 525,000 warrants expire on April 4, 2011.
The number of shares of common stock to be issued under these warrants and the
exercise price of the warrants will be adjusted in some cases if we issue stock
dividends, subdivide or combine stock, reorganize or reclassify capital stock,
distribute cash dividends, issue common stock or other securities convertible
into common stock (other than in a bona fide underwritten public offering) and
in certain other events. We are also required to give LCPI notice of adjustments
in the number of shares issuable under these warrants and of extraordinary
corporate events.
PLAN OF DISTRIBUTION
We may sell the securities:
to one or more underwriters or dealers for public offering and sale by
them; and
to investors directly or through agents.
The distribution of securities may be effected from time to time in one or
more transactions at a fixed price or prices (which may be changed from time to
time), at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. Each prospectus
supplement will describe:
the method of distribution of the securities offered thereby;
the purchase price and the proceeds we will receive from the sale; and
any securities exchanges on which the securities of such series may be
listed.
In connection with the sale of the securities, underwriters, dealers or
agents may receive compensation from us or from purchasers of the securities for
whom they may act as agents, in the form of discounts, concessions or
commissions. The underwriters, dealers or agents that participate in the
distribution of the securities may be deemed to be underwriters under the
Securities Act and any discounts or commissions received by them and any profit
on the resale of the securities received by them may be deemed to be
underwriting discounts and commissions thereunder. Any such underwriter, dealer
or agent will be identified and any such compensation received from us will be
described in the applicable prospectus supplement. Any initial public offering
price and any discounts or concessions allowed or paid to dealers may be changed
from time to time.
Under the agreements that may be entered into with us, underwriters, dealers
and agents may be entitled to indemnification by us against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which the underwriters, dealers or agents may be
required to make in respect thereof.
Each underwriter, dealer and agent participating in the distribution of any
securities that are issuable in bearer form will agree that it will not offer,
sell, resell or deliver, directly or indirectly, securities in bearer form to
persons located in the United States or to United States persons (other than
qualifying financial institutions), in connection with the original issuance of
the securities.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with and perform services for us in the ordinary
course of business.
Certain persons participating in an offering may engage in transactions that
stabilize, maintain or otherwise affect the price of the securities, including
over-allotment, stabilizing and short-covering transactions in such securities,
the imposition of a penalty bid, and bidding for and purchasing shares of our
common stock in the open market during and after an offering.
31
LEGAL MATTERS
Simpson Thacher & Bartlett, New York, New York, will pass upon specific
legal matters with respect to the securities. Certain regulatory matters arising
under the Communications Act will be passed upon by Wiley, Rein & Fielding,
Washington, D.C.
EXPERTS
The financial statements and schedules incorporated by reference in this
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and
are included herein in reliance upon the authority of said firm as experts in
giving said reports.
INCORPORATION BY REFERENCE
The SEC allows us to 'incorporate by reference' in this prospectus other
information we file with them, which means that we can disclose important
information to you by referring you to those documents. This prospectus
incorporates important business and financial information about us that is not
included in or delivered with this prospectus. The information we file later
with the SEC will automatically update and supersede the information included in
and incorporated by reference in this prospectus. We incorporate by reference
the documents listed below and any future filings made with the SEC under
Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act until we sell all the
securities covered by this prospectus.
1. Our Annual Report on Form 10-K for the year ended December 31, 2000.
2. Our Quarterly Reports on Form 10-Q for the quarters ended March 31,
2001, June 30, 2001 and September 30, 2001.
3. Our Current Reports on Form 8-K dated February 1, 2001, February 23,
2001 and February 28, 2001.
4. The description of our common stock contained in our Registration
Statement on Form 8-A filed pursuant to Section 12(b) of the Exchange Act.
We have filed each of these documents with the SEC and they are available
from the SEC's internet site and public reference rooms described under 'Where
You May Find Additional Available Information About Us' in this prospectus. You
may also request a copy of these filings, at no cost, by writing or calling us
at the following address or telephone number:
Patrick L. Donnelly
Senior Vice President, General Counsel and Secretary
Sirius Satellite Radio Inc.
1221 Avenue of the Americas, 36th Floor
New York, New York 10020
(212) 584-5100
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information.
WHERE YOU MAY FIND ADDITIONAL AVAILABLE INFORMATION ABOUT US
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any of these reports, statements
or other information at the SEC's public reference room at 450 Fifth Street,
N.W., Washington, D.C. 20549 or at its regional offices in New York, New York,
and Chicago, Illinois. You can request copies of those documents, upon payment
of a duplicating fee, by writing to the SEC. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available to the public at the SEC's internet site at
http://www.sec.gov.
32
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses, other than the underwriting
discounts and commissions, payable by the Registrant in connection with the sale
of the securities being registered. All the amounts shown are estimates except
for the registration fee and the filing fee.
Registration fee............................................ $ 125,000
Trustee's Fees.............................................. $ 100,000
Legal fees and expenses..................................... $ 600,000
Accounting fees and expenses................................ $ 300,000
Printing and engraving...................................... $ 450,000
Rating Agency Fees.......................................... $ 20,000
Blue Sky Fees and Expenses.................................. $ 10,000
NASD filing fees............................................ $ 50,000
Listing Fee................................................. $ 50,000
Miscellaneous............................................... $ 31,000
----------
Total................................................... $1,736,000
----------
----------
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 145 of the DGCL permits each Delaware business corporation to
indemnify its directors, officers, employees and agents against liability for
each such person's acts taken in his or her capacity as a director, officer,
employee or agent of the corporation if such actions were taken in good faith
and in a manner which he or she reasonably believed to be in or not opposed to
the best interests of the corporation, and with respect to any criminal action,
if he or she had no reasonable cause to believe his or her conduct was unlawful.
Article VII of our Amended and Restated By-Laws provides that we, to the full
extent permitted by Section 145 of the DGCL, shall indemnify all of our past and
present directors and may indemnify all of our past or present employees or
other agents. To the extent that a director, officer, employee or agent of ours
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in such Article VII, or in defense of any claim, issue or
matter therein, he or she shall be indemnified by us against actually and
reasonably incurred expenses in connection therewith. Such expenses may be paid
by us in advance of the final disposition of the action upon receipt of an
undertaking to repay the advance if it is ultimately determined that such person
is not entitled to indemnification.
As permitted by Section 102(b)(7) of the DGCL, Article 11 of our Amended and
Restated Certificate of Incorporation provides that no director shall be liable
to us for monetary damages for breach of fiduciary duty as a director, except
for liability:
(i) for any breach of the director's duty of loyalty to us or our
stockholders;
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
(iii) for the unlawful payment of dividends on or redemption of our
capital stock; or
(iv) for any transaction from which the director derived an improper
personal benefit.
We have obtained a policy insuring us and our directors and officers against
certain liabilities, including liabilities under the Securities Act.
II-1
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
1.1 -- Form of Underwriting Agreement.**
4.1.1 -- Form of Certificate for shares of common stock
(incorporated by reference to Exhibit 4.3 to the Company's
Registration Statement on Form S-1 (File No. 33-74782)).
4.1.2 -- Certificate of Designations of 5% Delayed Convertible
Preferred Stock (incorporated by reference to Exhibit
10.24 to the Company's Annual Report on Form 10-K/A for
the year ended December 31, 1996 (the '1996 Form 10-K')).
4.1.3 -- Form of Certificate of Designations of Series B Preferred
Stock (incorporated by reference to Exhibit A to Exhibit 1
to the Company's Registration Statement on Form 8-A filed
on October 30, 1997 (the 'Form 8-A')).
4.1.4 -- Form of Certificate for shares of 10 1/2% Series C
Convertible Preferred Stock (incorporated by reference to
Exhibit 4.4 to the Company's Registration Statement on
Form S-4 (File No. 333-34761)).
4.1.5 -- Form of Certificate for shares of 9.2% Series A Junior
Cumulative Convertible Preferred Stock (incorporated by
reference to Exhibit 4.10.1 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1998 (the
'1998 Form 10-K')).
4.1.6 -- Form of Certificate for shares of 9.2% Series B Junior
Cumulative Convertible Preferred Stock (incorporated by
reference to Exhibit 4.10.2 to the 1998 Form 10-K).
4.1.7 -- Form of Certificate for shares of 9.2% Series D Junior
Cumulative Convertible Preferred Stock (incorporated by
reference to Exhibit 4.5 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1999 (the '1999
Form 10-K')).
4.1.8 -- Form of Certificate of Designations, Preferences and
Relative, Participating, Optional and Other Special Rights
of 10 1/2% Series C Convertible Preferred Stock (the
'Series C Certificate of Designations') (incorporated by
reference to Exhibit 4.1 to the Company's Registration
Statement on Form S-4 (File No. 333-34761)).
4.1.9 -- Certificate of Correction to Series C Certificate of
Designations (incorporated by reference to Exhibit 3.5.2
to the Company's Annual Report on Form 10-K for the year
ended December 31, 1997 (the '1997 Form 10-K'))
4.1.10 -- Certificate of Increase of 10 1/2% Series C Convertible
Preferred Stock (incorporated by reference to Exhibit
3.5.3 to the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended March 31, 1998).
4.1.11 -- Certificate of Designations, Preferences and Relative,
Participating, Optional and Other Special Rights of the
Company's 9.2% Series A Junior Cumulative Preferred Stock
(incorporated by reference to Exhibit 3.6 to the Company's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1999).
4.1.12 -- Certificate of Designations, Preferences and Relative,
Participating, Optional and Other Special Rights of the
Company's 9.2% Series B Junior Cumulative Preferred Stock
(incorporated by reference to Exhibit 3.7 to the Company's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1999).
4.1.13 -- Certificate of Designations, Preferences and Relative,
Participating, Optional and Other Special Rights of the
Company's 9.2% Series D Junior Cumulative Preferred Stock
(incorporated by reference to Exhibit 99.2 to the
Company's Current Report on Form 8-K filed on December 29,
1999).
4.2.1 -- Rights Agreement, dated as of October 22, 1997, between
the Company and Continental Stock Transfer & Trust
Company, as rights agent (the 'Rights Agreement')
(incorporated by reference to Exhibit 1 to the Form 8-A).
4.2.2 -- Form of Right Certificate (incorporated by reference to
Exhibit B to Exhibit 1 to the Form 8-A).
II-2
EXHIBIT
NUMBER DESCRIPTION
------ -----------
4.2.3 -- Amendment to the Rights Agreement, dated as of October
13, 1998 (incorporated by reference to Exhibit 99.2 to the
Company's Current Report on Form 8-K filed on October 13,
1998).
4.2.4 -- Amendment to the Rights Agreement, dated as of November
13, 1998 (incorporated by reference to Exhibit 99.7 to the
Company's Current Report on Form 8-K filed on November 17,
1998).
4.2.5 -- Amended and Restated Amendment to Rights Agreement, dated
as of December 22, 1998 (incorporated by reference to
Exhibit 6 to the Amendment No. 1 to the Form 8-A, filed
with the Commission on January 6, 1999).
4.2.6 -- Amendment to the Rights Agreement, dated as of June 11,
1999 (incorporated by reference to Exhibit 4.1.8 to the
Company's Registration Statement on Form S-4 (File No.
333-82303) filed on July 2, 1999 (the '1999 Units
Registration Statement')).
4.2.7 -- Amendment to the Rights Agreement, dated as of September
29, 1999 (incorporated by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K filed on October 13,
1999).
4.2.8 -- Amendment to the Rights Agreement, dated as of December
23, 1999 (incorporated by reference to Exhibit 99.4 to the
Company's Current Report on Form 8-K filed on December 29,
1999).
4.2.9 -- Amendment to the Rights Agreement, dated as of January
28, 2000 (incorporated by reference to Exhibit 4.6.9 to
the 1999 Form 10-K).
4.2.10 -- Amendment to the Rights Agreement, dated as of August 7,
2000 (filed as Exhibit 4.6.10 to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30,
2000).
4.3 -- Indenture, dated as of November 26, 1997, between the
Company and IBJ Schroder Bank & Trust Company, as trustee
(incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement on Form S-3 (File No. 333-34769)
(the '1997 Units Registration Statement')).
4.4 -- Form of 15% Senior Secured Discount Note due 2007
(incorporated by reference to Exhibit 4.2 to the 1997
Units Registration Statement).
4.5 -- Warrant Agreement, dated as of November 26, 1997, between
the Company and IBJ Schroder Bank & Trust Company, as
warrant agent (incorporated by reference to Exhibit 4.3 to
the 1997 Units Registration Statement).
4.6 -- Form of Warrant (incorporated by reference to Exhibit 4.4
to the 1997 Units Registration Statement).
4.7 -- Form of Preferred Stock Warrant Agreement, dated as of
April 9, 1997, between the Company and each warrantholder
thereof (incorporated by reference to Exhibit 4.12 to the
1997 Form 10-K).
4.8 -- Form of Common Stock Purchase Warrant granted by the
Company to Everest Capital Master Fund, L.P. and to The
Ravich Revocable Trust of 1989 (incorporated by reference
to Exhibit 4.11 to the 1997 Form 10-K).
4.9 -- Notes Registration Rights Agreement among CD Radio Inc.
and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Lehman Brothers Inc., Bear, Stearns &
Co. Inc., NationsBanc Montgomery Securities LLC, U.S.
Bancorp Libra, dated as of May 13, 1999 (incorporated by
reference to Exhibit 4.4.1 to the 1999 Units Registration
Statement).
4.10 -- Indenture, dated as of May 15, 1999, between the Company
and United States Trust Company of New York, as trustee,
relating to the Company's 14 1/2% Senior Secured Notes due
2009 (incorporated by reference to Exhibit 4.4.2 to the
1999 Units Registration Statement).
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EXHIBIT
NUMBER DESCRIPTION
------ -----------
4.11 -- Form of 14 1/2% Senior Secured Notes due 2009
(incorporated by reference to Exhibit 4.4.2 to the 1999
Units Registration Statement).
4.12 -- Indenture, dated as of September 29, 1999, between the
Company and United States Trust Company of Texas, N.A., as
trustee, relating to the Company's 8 3/4% Convertible
Subordinated Notes due 2009 (incorporated by reference to
Exhibit 4.2 to the Company's Current Report on Form 8-K
filed on October 13, 1999).
4.13 -- First Supplemental Indenture, dated as of September 29,
1999, between the Company and United States Trust Company
of Texas, N.A., as trustee, relating to the Company's
8 3/4% Convertible Subordinated Notes due 2009
(incorporated by reference to Exhibit 4.1 to the Company's
Current Report on Form 8-K filed on October 1, 1999).
4.14 -- Form of 8 3/4% Convertible Subordinated Note due 2009
(incorporated by reference to Article VII of Exhibit 4.01
to the Company's Current Report on Form 8-K filed on
October 11, 1999).
4.15 -- Warrant Agreement, dated as of May 15, 1999, between the
Company and United States Trust Company of New York, as
warrant agent (incorporated by reference to Exhibit 4.4.4
to the 1999 Units Registration Statement).
4.16 -- Amended and Restated Pledge Agreement, dated as of May
15, 1999, among the Company, as pledgor, IBJ Whitehall
Bank & Trust Company, as trustee, United States Trust
Company of New York, as trustee, and IBJ Whitehall Bank &
Trust Company, as collateral agent (incorporated by
reference to Exhibit 4.4.5 to the 1999 Units Registration
Statement).
4.17 -- Collateral Pledge and Security Agreement, dated as of May
15, 1999, between the Company, as pledgor, and United
States Trust Company of New York, as trustee (incorporated
by reference to Exhibit 4.4.6 to the 1999 Units
Registration Statement).
4.18 -- Intercreditor Agreement, dated May 15, 1999, by and
between IBJ Whitehall Bank & Trust Company, as trustee,
and United States Trust Company of New York, as trustee
(incorporated by reference to Exhibit 4.4.7 to the 1999
Units Registration Statement).
4.19 -- Common Stock Purchase Warrant granted by the Company to
Ford Motor Company, dated June 11, 1999 (incorporated by
reference to Exhibit 4.4.2 to the 1999 Units Registration
Statement).
4.20 -- Common Stock Purchase Warrant granted by the Company to
DaimlerChrysler Corporation, dated January 28, 200
(incorporated by reference to Exhibit 4.23 to the 1999
Form 10-K).
4.21 -- Term Loan Agreement, dated as of June 1, 2000, among the
Company, Lehman Brothers Inc., as arranger, and Lehman
Commercial Paper Inc., as syndication and administrative
agent (incorporated by reference to Exhibit 4.22 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2000).
4.22 -- Warrant Agreement, dated as of June 1, 2000, between the
Company and United States Trust Company of New York, as
warrant agent and escrow agent (incorporated by reference
to Exhibit 4.23 to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 2000).
4.23 -- Form of Senior Indenture (incorporated by reference to
Exhibit 4.6.1 to the Company's Registration Statement on
Form S-3 (File No. 333-86003)).
4.24 -- Form of Subordinate Indenture (incorporated by reference
to Exhibit 4.6.2 to the Company's Registration Statement
on Form S-3 (File No. 333-86003).
5.1 -- Opinion of Simpson Thacher & Bartlett regarding
legality (filed herewith).
12.1 -- Statement re: Computation of Ratio of Earnings to
Combined Fixed Charges and Preferred Stock Dividends.*
23.1 -- Consent of Independent Accountants.*
II-4
EXHIBIT
NUMBER DESCRIPTION
------ -----------
23.2 -- Consent of Simpson Thacher & Bartlett (included in
Exhibit 5.1 filed herewith).
23.3 -- Consent of Wiley, Rein & Fielding.*
24.1 -- Powers of Attorney (included on signature page).*
25.1 -- Statement of Eligibility and Qualification on Form T-1 of
the Trustee to act as Trustee under the Indenture.**
- ---------
* Previously filed with this Registration Statement.
** To be filed by amendment or by a Current Report on Form 8-K in accordance
with Regulation S-K, Item 601(b).
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price represent
no more than 20 percent change in the maximum aggregate
offering price set forth in the 'Calculation of Registration
Fee' table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a
II-5
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to provisions described in
Item 15, or otherwise, the registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer of controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on
December 20, 2001.
SIRIUS SATELLITE RADIO INC.
By: /s/ PATRICK L. DONNELLY
..................................
PATRICK L. DONNELLY
EXECUTIVE VICE PRESIDENT,
GENERAL COUNSEL AND
SECRETARY
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ JOSEPH P. CLAYTON
........................................ President and Chief Executive December 20, 2001
JOSEPH P. CLAYTON Officer (principal executive
officer)
* Executive Vice President and Chief December 20, 2001
......................................... Financial Officer (principal
JOHN J. SCELFO financial officer)
* Vice President and Controller December 20, 2001
......................................... (principal accounting officer)
EDWARD WEBER, JR.
* Director December 20, 2001
.........................................
LAWRENCE F. GILBERTI
* Director December 20, 2001
.........................................
DAVID MARGOLESE
* Director December 20, 2001
.........................................
JOSEPH V. VITTORIA
- ---------
* Signed in accordance with power of attorney.
/s/ PATRICK L. DONNELLY
.........................................
Patrick L. Donnelly
Attorney-in-fact
II-7